Former German Chancellor Angela Merkel has written a book full of insults about incoming US President Trump. You'd think, given the weakness of Germany's economy and military, that its not in the best interests of the nation to attack America's new leader. What's amusing about her book is the line that Trump “looked at everything like the real estate developer he was before he entered politics” - as a zero-sum game. “For him, all countries were rivals in which the success of one meant the failure of another. He didn’t think that prosperity could be increased for all through cooperation.” Which only goes to show that Merkel doesn't know what property developers do. That is, construct new buildings, renovate old ones and sell, lease and rent those buildings. In terms of contribution to value-added GDP, construction & real estate is one of the biggest industries in the world. The Former German Chancellor is utterly confused about real estate development being a zero-sum game: developers are not rivals. One's success does not mean another's failure. The stock market is different. A founder of modern finance theory, Eugene Fama, is quoted as saying of share traders, "Active investment is a zero-sum game. Passive managers don't play the game. They buy something resembling the market as a whole, or some segment of the market, and don't respond to the actions of active managers". What he's saying is that for active share traders who try to beat the market return, the gains for those who succeed in doing so are exactly offset by losses for ones who fail. For a person with the status of Merkel to incorrectly characterize what property developers do, showing such an ignorance about that industry, putting in writing they have the same mentality as active share traders who sit on computer screens all day, is remarkable. Next time she visits Germany's Parliament in the Reichstag building, with its Norman Foster architect designed glass dome, maybe she should take a look and admire it - and contemplate zero-sum games again.
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Monopolies are running riot in NZ. Air NZ, which is majority state owned, for one. Auckland Airport, which is part owned by the Council. The Big Banks, of which State owned Kiwi Bank is one. Fletcher Building that was kept afloat by the government's wage subsidy. The Big Supermarkets that were given a State Monopoly License during the Covid lockdowns whilst small green grocers were bankrupted. The Commerce Commission hasn't scratched them. It is ineffective. It should go the way of the Productivity Commission and be wound up. To appear its doing something, it has decided to go after the likes of children selling fund-raising cakes on the street corner for racketeering. Well, not quite. But this week Com Com tried to look tough by filing criminal charges against One NZ (formerly Vodafone) for saying in adverts it will offer “100% mobile coverage. Launching 2024”. One NZ is teaming up with Elon Musk's Star Link. As a reward for such innovative practices, and for NZ business building relations with the world's best-known entrepreneur, richest man and Trump White House Adviser, Com Com has decided to wage war against the company.
The Commission says One NZ has breached the Fair Trading Act, since its advert is "likely mislead consumers because it gives an .. impression that .. [they] would have access to instant communication from all locations in NZ when, in fact, that may not be the case.” It says, "coverage will be accessible only in locations where a mobile phone has line of sight to the sky. This means users may not be able to access the service inside a building, a car, or underneath trees”. Don't stop there, Com Com. Go file international criminal charges against Musk for saying, "SpaceX plans to send 5 rockets to Mars in 2026". How dare he cheat the world with such claims. How dare he monopolize Mars.
Now compare One NZ's claims with Otago University's. Google it and you will find, "The University of Otago is ranked in the top 1% of universities in the world". That's flat-out false. The University has repeated it for ages. The QS rankings which Otago says its "top 1%" claim is based on, do not rank it in the top 1%. Nor in the top 10%. Why does Otago keep repeating the falsity? For love of money. To recruit more students. Improve its weak finances. Bolster its education business. The University is an oligopoly. And if you're looking for collusion, the NZ Vice Chancellors talk amongst themselves all the time. They formally meet six times a year to discuss strategy, and talk informally regularly. Otago is far more dominant in its non-market than One NZ is in its market. There are only a handful of universities in NZ. There are two major ones in the South Island, of which Otago is largest. On metrics like staff numbers and funding, Otago is second biggest in NZ. Its engaged in plans to stop Waikato from getting a Medical School, since that would threaten Otago's duopoly with Auckland. Its pumping money into that campaign as we speak.
So there we have it: Otago runs a misleading promotional campaign "to influence consumer purchasing decisions" and strengthen its dominant position. It is colluding with its oligopoly partners. Its battling to run a potential competitor out of town. Does it come under the auspices of the Commerce Commission? Too right it does. Com Com's former Chair, Alan Bollard, stated "tertiary institutions are in competition with each other for students, and they are not exempted from the Act which .. prohibits anti-competitive behavior". Is it because tertiary outfits are so left in their politics, publicly funded, or because former Labour-aligned politicians like Grant Robertson are their Vice Chancellors, that one law applies to them and another to the most innovative private sector companies in the country, like One NZ?
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