Business Policy versus Government Policy

Many thanks to colleague John Beck from the Geography Dept for this piece by Bryan Gould in today’s New Zealand Herald. Former UK Labour Party Deputy Leader and currently Vice-Chancellor of Waikato University argues that in recessionary phases of the economic cycle what is in the best interests of a business is the opposite of what the actual economy requires. A business might cut costs and make workers redundant to help its balance sheet but the economy requires more employment and spending to get out of the downturn. Good economic management may often seem counter-intuitive. A case in point is what economists call the “lump of labour” fallacy – the belief that there is a fixed amount of work available and that the task is to decide how that is to be shared out fairly. Click here to see the full article.

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