By Vivienne Porzsolt
Jonathan Swift once responded to some 18th century economists with a sardonic suggestion that children of the Irish poor might be farmed as food for the rich. Not much has changed, it seems, if the work of a prominent New Zealand economic rationalist is any guide.
Gareth Morgan has come up with a work titled Mitigating Misery: a Preliminary Assessment of New Zealanders' Capacity to Absorb Cuts in Real Incomes. In it, he addresses himself to the more efficient running of New Zealand's homes ("the household sector of the economy", or "home production sector").
In a remarkable deduction, Morgan suggests that "as market wages fall, the supply of labour to the home production sector will rise". In other words, unemployed workers will tend to stay at home, and the women will have more time for housework and making clothing. The men might be persuaded to take up gardening.
However, he does sound a warning: "It is important the government consider the impact on economic efficiency in the household sector of its policies to establish appropriate levels of social welfare payments ... If payments are set too high, they will suppress economic efficiency."
Morgan goes on to suggest some areas in which the government might tighten up: "Government spending should not pursue policies that increase the supply of labour to the market economy at a time when there is excess supply. Tax deductibility of child care may well be an example of policy with dubious effects on the economic adjustment process."
He also thinks many people are mistakenly pursuing greater cash incomes, which are of limited value when compared with "home maintenance, home food and clothing manufacture".
The worthy economic rationalist also has some handy hints for saving money about the house. An increase in household labour can reduce the food budget for a family of four from $120 to $47 per week, and then there are endless possibilities for "selling and bartering on the inter-household market".
It seems Morgan is a bit of an old-fashioned gent as well. At least he favours old-fashioned values for the poor: "There would be a change to cheaper cleaning materials ... given the employment of more labour-intensive techniques by a home worker
... labour saving home appliances are not accommodated. Leisure and entertainment focus on simple pleasures. A car is out. Walking or public transport are substituted."
As well, granny can make herself useful: "the incorporation of an elderly relative into the home [can] reduce her shelter cost" while at the same time providing a source of child-
care. This provides an economy of scale as "household furnishings for separate households are dispensed with. The transport costs of visiting grandma or the communication costs of mail or telephone are eliminated".
Morgan doesn't overlook single parents. For them, "the cost of housing will impel many to seek a sharing arrangement with others".
All in all, Morgan has a complete vision for remaking society: "As more people withdraw from the market economy, the substitution of alternate trading, transport, education and even health structures could become significant ... As some community doctors find their patients' market incomes declining and thus the demand for health services receding they may be forced to adjust their own business. Trade via barter and in kind can be expected to grow."
As for education, "the relevance of a traditional education may diminish for many, if the market economy is unable to provide paid work for them ... the skills required for home production are quite different to those required in the market economy ... The corollary of this is that the government may well be spending too much on delivery of present education outputs.
"As a consequence of the policy directions we anticipate, there will permanently be a large number of people who are denied the degree of access to the market economy that has been traditional, either because of lack of jobs or wage rates uncompetitive with the other demands on people's time, such as home production activities or leisure."
Moreover, the government should promote the efficiency of the household sector by cutting state benefits to the poor, as these discriminate against more efficient households. Such cuts would "foster generation of greater market wealth through lessening the tax burden faced by business".
Not one to shrink from the conclusions of his proposals, Morgan acknowledges: "it is easy for the scenario painted to be regarded as quite chilling in many ways ... differences in material wealth will be accentuated". The government will face "new political trade-offs ... such wealth differences will be a source of social pressures hitherto not experienced in
New Zealand." As well, "the trend for more women to participate in the money economy may well be reversed".
Gareth Morgan might be disappointed to find that none of this is original. Like Jonathan Swift before him, Karl Marx observed similar thinking in the 19th century. He concluded that a state run in the interests of employers will inevitably attempt to set wages at the minimum level necessary to maintain workers in a condition fit for work and to enable them to produce children to replace themselves.
At one stage in the late 18th century, the unwillingness of English manufacturers to do even this caused a labour shortage. This resulted, after a decade or so, in some welfare measures such as the establishment of orphanages, and some controls on the length of the working day and the use of child and female labour.