We used to make shit in this country…

I was filled with despair when I read this morning that Haier now own Fisher and Paykel, and reminded of an episode in my all-time favourite TV series – The Wire. Season 2 focusses on the waterfront and the struggles facing Frank Subotka, the treasurer of the International Brotherhood of Stevedores to find work for the union members. Almost all they now do is unload electronic goods, drugs and sex workers, and in frustration he says something to lobbyist Bruce DiBiago that encapsulates the reason the Western economic system is collapsing: “You know what the trouble is, Brucey? We used to make shit in this country, build shit. Now we just put our hand in the next guy’s pocket.”

We used to make shit in NZ; it was good shit and it kept us employed but now we import damn near everything. At the supermarket the other day I noticed that the Sanitarium peanut butter was made in Australia and a packet of frozen spinach was  grown and packaged in China. Right now every item of clothing I am wearing and the computer I am using to write this are made in Asia. I had to phone Telecom the other day and ended up talking to someone in Manilla.

Bill English is convinced that there is nothing wrong with foreign ownership of our assets and businesses, but I’m not so sure, and I’m not the only one that fears that we’ll end up tenants in our own country that are employed by foreigners. I’m not an economist and maybe I’m missing something, but I just can’t understand how we can survive economically if we barely manufacture anything while depending on borrowing from overseas or selling state owned assets to stay afloat.

Update 12/11/2012: I found this article in today’s Herald. I know a lot of people who have made a lot of money with residential real estate, and then spent it on cars, overseas holidays, toys etc – almost all imported from overseas. I’m no economist, but that seems really stupid.


6 thoughts on “We used to make shit in this country…

  1. NZ should make the stuff that it’s good at making, sell that offshore and buy in the stuff that other countries are good at making – that way everyone wins. For the same reasons it makes sense for me to get paid at doing what I’m good at and paying other people to do what they’re good at. It would be a complete waste of time for me to sew my own clothes. I get better clothes by working more accounting hours and buying ready made clothes.
    And if we are going to ban foreign ownership of “our assets” or “our businesses” then surely we need to also ban Kiwis (and their companies and superannuation funds) from owning any overseas assets or businesses?

    • You have made an interesting comment that reinforces much of what I’m saying – the best use of your time is you doing what creates the greatest value. New Zealand’s biggest exports are primary products, yet the 2006 Census showed that only 14% of the population are rural, so that means 14% of the population produce most of what we earn.

      72% of Kiwis have at least upper secondary school education which was close to the OECD median of 73%, but when you look at adults with bachelor’s degrees or higher, New Zealand ranked fifth equal (with Denmark and Canada) out of 30 OECD countries, with a rate of 25 percent. We have a highly educated urban population (higher than Australia), so why does most of our income come from the land and not the cities?

      That is like you making clothing for a living and using your accounting degree to do the household budget.

  2. So what you are saying David is that the cheap ticket price you pay for shoddily made imported goods actually hides a far higher cost than a locally made product which travels a short distance, has no effect on our balance of trade and supports local employers, yet gets classed as “ëxpensive”. The problem is the inbalance betwen price, value and cost. Until people stop looking at the price of a purchase and start looking at the value and cost of an item there won’t be a solution.

    • That’s pretty much on the money Penny. We also need to start assessing consumer goods by what they do rather than what they are. Take smart phones for example: I have one that is about a year old and when I got it I couldn’t believe how much it did, and it still does everything I want a smart phone to do which means I will keep it until it dies. For a lot of people, they use their phone to express who they are to the outside world, and their phone has to be the latest model of iPhone, therefore when the iPhone 5 came out, they queued for hours even though it didn’t really do anything different from the iPhone 4..

  3. David, if what you are wearing is made in China then you need to ask yourself why you are buying it when there are so many “made in NZ” options available. Most of the time we buy imported stuff because it is easy and cheap and we are lazy consumers (please tell me that you put the imported spinach back and went to your local market!!) I challenge you to spend a week buying only NZ made products and see how it feels, heck why not go all out and have an NZ made Christmas??

    • The thing is Penny, there aren’t that many “made in NZ” options any more. Today I’m wearing an Untouched World jersey that is made in NZ but it is one of the few 100% made in NZ garments I own because I have no idea where I can buy a pair of made in NZ jeans that I can afford – Untouched World also make jeans, but they cost around $250.00. For $250.00 I can go to the Warehouse and buy 2 pairs of jeans, several shirts, underwear, shoes and a packet of Reese’s Cups on the way out, and that’s a big part of the problem.

      We have become accustomed to a standard of living that is only possible if we get the products we use and consume made in countries like China, India or Mexico where the manufacturers can pay their factory workers a fraction of even minimum wages in NZ and don’t have to comply to the restrictions on the environmental impact of their operations. In essence we have exported our pollution and employment problems which means that companies like Levi Strauss, Sony, Apple and Kraft are able to sell more stuff by making it more affordable.

      How are we (NZers as a whole) earning the money to buy the shiny new iPhone or 700000 inch plasma TV we feel so compelled to buy because what we already have is so last year? In 2010 our export earnings were $40,672m and the top 5 export earners (in order) were dairy at 21%, meat at 12%, timber (mostly logs) at 6.5% with crude oil at 4%. All of these were primary produce and the biggest (dairy) is only really economically viable if milk fat prices stay high, interest rates stay low, rainfall stays up, water stays free and waste stays free or in the case of carbon is subsidised (by the taxpayer).

      We have one of the world’s most educated populations with a history of innovation and technological brilliance, yet we earn most of our money selling logs and milk powder? WTF?

      And yes, I did put the frozen spinach back and picked some fresh from my garden instead.

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