Home > Dollars & Sense, The Body Politic > A lesson in free market economics for ex-National MP, Katherine Rich

A lesson in free market economics for ex-National MP, Katherine Rich

.

Milo's Week Invisible Hand

.

It seems that our Aussie cuzzies are taking matters in hand and implementing their own “Buy Local” policies. A few overly-zealous supermarket operators have even taken to removing New Zealand-made products from their shelves,

.

Supermarket stoush sours CER

.

According to Tracy Watkins’ story in the Dominion Post, Key will raise the problem when he meets Australian PM, Tony Abbott in Sydney, later this week.

Raise what, precisely?

This is capitalism/free market/whatever at work. Supermarket owners can stock whatever goods they like. If an owner took it upon him/herself to stock goods only from Outer Mongolia – that’s his/her call in a free market.

In fact, like the Scottish Shop in Dunedin, some retailers are very specific in what they stock.

Food and Grocery council CEO,  Katherine Rich, complains that this policy “undermined the spirit of CER and risked a backlash in New Zealand as well”,

‘‘It’s an issue we’re watching closely because both major supermarkets, Coles and Woolworths, have come out with a very pro-Australia stance. There have been some high profile delistings of some New Zealand brands for no other reason than that they are not Australian.’’

Which is supremely ironic as Ms Rich was a one time member and National Party minister from 1999 to 2008.

So she should know how the free market, capitalist system works. It’s a bit too late in the day to start whinging that another nation’s private companies have adopted their own, specific retail policies.

After all, this is something the “invisible hand of the free market” will work out. According to neo-liberal dogma, if consumers want to purchase New Zealand goods, they will go elsewhere, to other retailers. Or buy via the internet. Or hop on a flight to do their grocery shopping here in New Zealand, at a Pak N Save.

That is how the Free Market works, right?

In fact, as Ms Watkins correctly reported, CER binds governments – not private companies;

One option would be for the Government to lodge a formal objection but sources say the situation is complicated by the fact that CER is a government-to-government agreement, and it is not ‘‘straight forward’’ whether supermarkets are captured by that process.

Very astute.

After all, wouldn’t it be a form of “communism” to bind private companies to buy certain goods?!

On the other hand, free trade agreements such as the CER, or the China-NZ FTA, or the impending TPPA, do bind governments in the way they must purchase goods and services.

A New Zealand government wanting to implement a procurement policy that favours locally produced goods and/or services would immediatly be sued by other nations or foreign corporations, via the World Trade Organisation. (In fact, New Zealand sued Australia at the WTO, over the latter’s refusal to allow New Zealand applies into that country. We won.)

So free trade agreements bind governments – but not private companies (those Kiwi apples can be exported to Australia – but no law can force an Aussie retailer or chain-stores to stock them).

This is something that New Zealanders might consider as the issue of the TPPA nears resolution; signatory governments – like our government – would be bound by a TPPA. But private companies would not (or only in peripheral ways) be bound.

As for Katherine Rich?

Tough luck, lady. This is the capitalist system at work.

Suck it up.

Welcome to  the corporatisation of human civilisation.

.

*

.

References

TV1: Sweet success after bitter battle over NZ apples

Fairfax media: Supermarket stoush sours CER

.

*

.

Why I am a Leftie

Above image acknowledgment: Francis Owen

This blogpost was first published on The Daily Blog on 5 February 2014.

.

.

= fs =

Advertisements
  1. 12 February 2014 at 9:38 am

    Reblogged this on gitsbeat and commented:
    we should do the same .especially with their banks .

  2. 12 February 2014 at 11:18 am

    If you don’t want to buy aussie products at countdown check the bar code they all begin 9-then a 3 nz made are 9-4

  3. 12 February 2014 at 11:18 am

    But watties stuff is exported to china to be shipped back to nz bloody crazy.

  4. Priss
    14 February 2014 at 1:23 pm

    Oh dear, it seems that Ms Rich is caught between a rock and a hardplace. She’s been remarkably quiet on this issue since the story broke.

  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: