Labour Leader David Shearer took to the stage in the Wellington suburb of Brooklyn today to give a major speech about the economy, in which he described what it is and roughly how it works.
“The economy is the collective system of financial transactions between individuals and/or corporations,” said Shearer to loud applause. “It is an aggregate of all trading, distribution, production and consumption of goods or services in a specified region.”
He went on to say that prices of goods and services in an economy are determined by the supply and demand of those goods, and that generally, lower supply relative to demand results in higher prices.
“Conversely,” said Shearer, “higher supply relative to demand results in lower prices.”
He warned about treating the economy as a singular, homogenous entity.
“Economies are large and complex systems,” he said. “While sometimes referred to as singular entities, they actually comprise many smaller, often times contradictory elements and interests. When somebody says the economy is doing well, it might be unclear exactly what they mean. It depends entirely on what part of the economy they are talking about.”
“This is the big kahuna,” he added.
Attendees of the speech described it as informative, and said that it would help Shearer to fend off the government’s criticism that he doesn’t understand how the economy works.
“I’ve been to a few of Shearer’s speeches this year,” said James Creek, a student member of Young Labour. “This one definitely taught me more than any other.”
Another attendee could not be asked about her experience as she was sleeping.