National portrait: Eric Crampton, economist and original thinker

Economist Eric Crampton is available when artists or governments need economic advice.
Cameron Burnell/Fairfax NZ

Economist Eric Crampton is available when artists or governments need economic advice.

Eric Crampton is a thin, boyish-looking Canadian who brings an original perspective and even a sense of fun to economic debates, which have not traditionally been a source of great humour. 

A case in point. If you go to the website of the New Zealand Initiative, the Wellington think tank that has employed Crampton as its head of research since 2014, you will find photos of Crampton and two other guys luxuriating in a hot tub full of milk in a Christchurch art gallery. You could say it was literally a think tank: the two others were law professor David Round and artist and writer Sam Mahon, and they were trying to solve Canterbury's dairy problem. 

The hot tub was a work called Honeymoon Latte by artist Gaby Montejo​. Crampton remembers that when he lived in Washington DC, before moving to New Zealand in 2003, his wife volunteered at the famous Corcoran Gallery of Art. She continued to do art things in New Zealand and "sometimes I would get called in when an artist wanted an economist".

How often did that happen? "Not that often, but there was a money-themed one at the Physics Room in Christchurch. Talking to audiences who aren't your standard group of students or the usual people who would listen to an economist is always great fun."

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Crampton wrote up the milk tank experience for the Initiative site under the title "Hot Tub Talk Machine". He explained that Round reminisced about the clean rivers of his childhood, Mahon wondered about the economic benefits of dairying and trainee chef Camila Nieuwlands​ thought we should give up dairy.

All were valid responses but could also have been predicted. Crampton wrote that he came at it a different way: "I argued that we have a pricing problem. Water is allocated by resource consents, and trading is pretty limited. Objectors blocked an Ashburton water bottling plant, but nobody really knows whether it makes more sense to irrigate paddocks and ship milk, or to cut out the middle cow and just ship water."

As one of the New Zealand Initiative's ancestors was the Business Roundtable, it is sometimes called a Right-wing think tank. Crampton would rather say they "like market-oriented solutions". He cites a report on interest-free student loan policies that recommended shifting money spent on subsidies for mostly rich kids into better tertiary preparation for poor kids. 

"I thought that was a very Left-wing recommendation to stop giving money to privileged people and put it where it's going to do good for people who don't have as much. I prefer to think of it as just looking for policy solutions that work."

Politics can become bogged down in short-term thinking based on voter appeal and what is expected from party affiliations. It tends to be binary and reactive. People in think tanks like this one are public intellectuals who can step past those political boundaries, and it is telling that one of Crampton's key influences and close mentors when he taught at Canterbury University was the late Denis Dutton, another North American contrarian and original thinker. 

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Dutton was more famous for what he did outside the university than what he did within it. In other words, he was acting as a critic and conscience of society, which is harder than ever in the current tertiary environment. Putting ideas out there and appearing in the media to discuss or defend them is "not in the normal nature of an academic department," Crampton says. He has found he can have more direct impact on government in his current role than he ever did as an academic staffer. 

Canterbury was his first academic job after graduate school at George Mason University in Washington DC. Before that, he studied at the University of Manitoba in Winnipeg, Canada. New Zealand's relaxed regulatory environment appealed to a classical liberal who stands for political and civil liberties and limited government. 

The superannuation debate is another area where rigidity has set in. Should the age eligibility stay at 65 or should it go up? Which way will Labour go? Will Bill English take the bold political risk of raising the age? In a blog called "More Solved Problems", Crampton proposed a solution to satisfy Labour leader Andrew Little's concerns about manual workers who cannot work past 65. How about a disability benefit equivalent to super that covers workers who are over 65 but are younger than the new age of eligibility? That seems easy.

"I don't know if I solved the issue but it frustrates me when people encounter a first reason not to do something and don't try to get past it." 

New Zealand remains "a fantastic place with a lot of potential" but the failure to address superannuation costs and housing affordability are for Crampton the great disappointments of the John Key era. We had good eight years but, as in the title of another blog, Key was "quite an underachiever"

The same era saw the government's management of the Christchurch rebuild, of which Crampton was a critic: "Auckland's housing crisis was a sin of omission. Post-quake Christchurch was a sin of commission." 

But housing affordability underlies every other social concern. Child poverty fell between 1982 and 2014 until you include housing costs, he says. Inequality also. 

"It's really easy to see where inequality concern will come from," he says. "If you're in Auckland and you see people that have more money than you bidding for a scarce number of houses, it's going to be terrifying, right? Every time you turn a positive-sum game into a zero-sum game, everyone gets a little bit more antsy about the people they're fighting against.

"If you've got land-use planning wrong, it's hard for anything else to be right. You get fundamental screw-ups based on zoning being messed up. People have too long a commute. They're paying too much out of household income to cover the rent. Increases in productivity turn into appreciation in land prices rather than improvement in living standards when the supply of housing is constrained."

But Crampton has some confidence that English could untangle this mess. 

"It's a damn hard subject. If anybody understood problems of land use planning and getting that right, it's English. I expect it to be one of this top priorities. I'll be really disappointed if it isn't."

 - Stuff

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