Tuesday, 22 February 2011

Mr Oram's Revolution

Must Try Harder: Business commentators like Rod Oram (above) are constantly berating New Zealanders for their failure to grasp the nettle of neoliberal "reform". Mr Oram is now demanding a "cultural revolution" to "help us build a business one". But New Zealanders have been living through a Rogernomics-inspired cultural revolution for twenty-seven years - yet still the Neoliberal cry is for more of the same. Perhaps its time to stop criticising the patient's failure to improve - and start questioning the cure.

A CULTURAL REVOLUTION? Rod Oram wants one. Writing in The Sunday Star-Times of 20 February, the respected business commentator laments the state of our nation. "We are locked into a low-growth trajectory thanks to misdiagnosing our challenges, misjudging our opportunities and poor execution of our few good ideas."

Mr Oram attributes these failures to five crucial deficiencies in our national character: Complacency, Delusion, Distrust, Distraction and Frustration. His prescription: "We need a cultural revolution to help us build a business one."

Angry denunciations of Kiwis’ manifold deficiencies by business leaders and commentators have become something of a fixture on the business pages of this country’s newspapers. Clearly we are a bitter disappointment to the arbiters of change – so much so that nothing less than a cultural revolution is required to correct the errors of our ways.

I thinks it’s a little late (and more than a little cheeky) to demand a cultural revolution from a nation which has spent the past quarter-century passing through one.

The economic and social reforms unleashed by the Fourth Labour Government in 1984 have not only transformed New Zealand, they have profoundly altered New Zealanders.

For those born and raised in the dark cavern of Rogernomics there can, of course, be no memories of the sun. The deeper tragedy, perhaps, is that those New Zealanders fortunate enough to grow up in a country bathed in sunshine have somehow convinced themselves that the magic lanterns responsible for Neoliberalism’s deceptive shadows are a preferable alternative.

We have forgotten so much – and swallowed so many extraordinary lies.

Foremost among these being the lies about public ownership and the inefficiencies of the State.

How many times, over the past 25 years, have we been fed the image of the lazy employee of the "Ministry of Jerks", leaning on his shovel at the side of the road? Who now remembers the elite Ministry of Works construction teams who built New Zealand’s world-beating hydro-power schemes on time and under-budget?

Did anyone pause to wonder why the huge snowstorm that cut the power supply to so many thousands of Cantabrians a few years back didn’t wreak more havoc on the region’s energy infrastructure? No. Because we take the excellence of its engineering and the gold-standard quality of its construction completely for granted. It never occurs to us that a privately owned construction company – mandated to provide a healthy rate of return to its shareholders – would never have provided this nation with such a robust and reliable system.

The Rogernomes couldn’t get rid of the Ministry of Works fast enough – and for very good reason. Far from being a fiscally draining make-work scheme for New Zealand’s most indolent and unintelligent drones, the Ministry of Works, from its inception, had been home to some of this country’s most innovative and creative civil engineers, architects, town planners and designers. Indeed, it’s probably not drawing too long a bow to suggest that the Ministry of Works highly-motivated public servants embodied the practical wisdom, quiet self-confidence and understated patriotism, for which New Zealanders are so universally admired.

That’s what made it so dangerous. In the eyes of the Neoliberal revolutionaries the Ministry constituted that most dangerous of threats – an alternative source of ideas and explanations. For a regime whose slogan was: "There is NO alternative" the Ministry was anathema. It not only had to be destroyed, it had to be defamed.

So, perhaps Mr Oram is right. Perhaps we do need a cultural revolution. A revolution dedicated to rooting out the five deforming "character" deficiencies Neoliberalism transmits to the populations it infects.

Complacency: The complacent ideological assumption that the market knows best.

Delusion: The delusion that a nation of isolated and disconnected individuals (the Internet does not equal intimacy) will ever summon-up the collective energy to identify (let alone pursue) the public good.

Distrust: The distrust of the past as a source of solace, strength and inspiration; of intellectuals, artists and anybody else who dares suggest that a more generous existence lies beyond Neoliberalism’s cave; and of the scientific method - with its power to expose the fads and fallacies of dogmatic ideologues.

Distraction: The need for constant and socially divisive distraction – to prevent the population from ever accurately identifying the true source of its insecurity and despondency.

Frustration: The creation of massive levels of personal frustration in order to maintain the social tension required to keep Neoliberalism’s victims angry and divided.

Since the premiership of Julius Vogel (1873-76) wise New Zealanders have understood that their country is only viable as a national economy if its best and its brightest, rather than being dispersed by the anarchy of the market, are concentrated and empowered under the protection of an active and innovative state.

Executing that "good idea" really would require a revolution.

This essay was originally published in The Press of Tuesday, 22 February, 2011.

11 comments:

Sanctuary said...

I thought Oram's piece arrant nonsense. It was as if he'd written it just after he had to much of an excellent Central Otago red at some business conference where they'd just spent the entire day sucking each others dicks an bitching about how one appreciated their genius.

Robert Winter said...

May I suggest that you miss the nuance of Mr Oram's commentary? He is not a slavish "neo-liberal", but he does believe in a successful business sector (which, I suggest, most of us want if we want a higher standards of living). He spends much of his time attacking the mindless ideology of neo-liberalism (in terms of individualism, employment relations, R&D, narrow financial measurement and so on). His trenchant criticism of NZ managerial performance has made him almost person non grata in business circles. He does believe in markets and trade, and, I expect, Capitalism of the mixed economy sort. He certainly turns up at Fabian Society meetings and talks sense, often with an endearing quirkiness. My take on what he wrote recently is that he continues his critique of mindless neo-liberalism and management failure in NZ, and calls for the type of serious re-appraisal of our economic (and, therefore, social) model, much as many of us in the Labour Party are calling for.

I understand, also, that he was once the beer correspondent of the FT.

chris73 said...

Not on subject but I thought you and Cameron Slater came across quite well in Citizen A

Nick Best said...

Chris – It seems to me that there were some very big problems with the state lead model that you champion, hence the economic crisis that by 1984 lead to the Douglas/Lange reforms. It’s certainly a fair argument to attack the correctness of those reforms but have you written on why the welfare state from 1954 or so onwards wasn’t working? I’m thinking of the 0% per capita productivity gains from 1960 – 1980, the steady decline in our relative incomes from 1950 onwards, the exploding national debt etc.

Olwyn said...

I understood the Oram article in roughly the same way as Robert Winter did; as a critique of our business culture rather than our overall culture. He seemed to me to be challenging the "business" model that Victor has been known to challenge; where hubris is embraced,innovations are too risky to consider, and low wages or staff reductions are understood as "growth" - the large frog in a small pond syndrome. You have recalled the constant charges of "inefficiency" that accompanied the dismantling of the state apparatus. Oram can be understood as saying to business, "Alright, you got your own way at last. So why are you just sitting there like a passive greedy baby? Wasn't NZ going to be better with you in charge? If you still think this, then here are a few tips."

Yeti said...

Could it be that the neo-liberal approach that you appear to dislike is the best of a bad bunch? Nick @ 6:41 points out the accepted wisdom that there wasn't really much choice for NZ in the Eighties and no one has been able to come up with a better way since.
Also, who is to decide what is a public good? In whom should we invest our trust to be the arbiters of public goodness? Seems to me that what you think would be good isn't that far off a totalitarian state. What with the best and brightest concentrated - how would this be done without coercion, or at the very least ‘direction’? The thought of an elite being ‘empowered under the protection of an active and innovative state’ frankly terrifies me.
The free market may well be anarchic but I’d rather that than a planned economy. The latter hasn’t really served any country that has tried it that well in the long run.

Anonymous said...

Chris - were you actually in the country pre 1984???

I can recall not being able to expand staff numbers, because state run Telecom couldn't provide a PABX for 9 months! and that was a second hand one from Denmark.

I can remeber Marketing managers jetting around the world on export "grants", with no likelhood of any sales - it was a joke.

We've just come through 9 years of labour/jim Anderton style economic development - the "lets set up a huge govt dept MED - and let me get lots of photo ops giving away $20k chqs" - and guess what - that didn't work.

Which of the 1984 reforms do you want to reverse? do you want a fixed exchange rate? currency controls? farm subsidies?

And yes the Telecom of today with contractors is better than the old dept. If you need to use them - you'll them prompt and efficient - and they actually care about getting your job done properly, and getting the good feedback.

Brendan said...

Chris, your argument that a 'gold standard' of quality can only be achieved by a state run monopoly, using your example of the former Ministry of Works, tells me that you know very little of how today's economy actually functions.

Every day in New Zealand, tenders are let for the provision of products and services that meet an agreed specification, be it a bronze, silver or gold standard, and the market meets those customer expectations based upon agreed contractual milestones and deliverables.

In that way, the customer, often State customers, get the best solution at the best price in a transparent and open process.

As an aside, one of the areas that we lead the world is in farming and milk production. Thankfully, since 1984, there are no Government farming subsidies in sight, and yet the invisible hand of the market has produced a world beating result.

Yes, the farmers have 'collectivized' under the Fontera brand, but they have done this freely, without coercion and without control or direction from the State.

The reality is that the market, governed by enforceable contracts, between willing buyers and willing sellers, is the most efficient, wealth producing mechanism known to man.

Do we really want to return to a pre 1984 world of State run 'everything', artificially managed exchange rates, a corrupt system of import licenses and tariffs? The former protecting big business, and the latter the trade unions?

You cannot return to the 'leaks and onions' of Egypt without accepting the bondage and slavery that comes with them. Far better to focus upon the milk and honey of the promised land, where there is both liberty and opportunity for everyone.

Matthew L said...

"May I suggest that you miss the nuance of Mr Oram's commentary? He is not a slavish "neo-liberal", but he does believe in a successful business sector (which, I suggest, most of us want if we want a higher standards of living). He spends much of his time attacking the mindless ideology of neo-liberalism (in terms of individualism, employment relations, R&D, narrow financial measurement and so on). His trenchant criticism of NZ managerial performance has made him almost person non grata in business circles. He does believe in markets and trade, and, I expect, Capitalism of the mixed economy sort. He certainly turns up at Fabian Society meetings and talks sense, often with an endearing quirkiness. My take on what he wrote recently is that he continues his critique of mindless neo-liberalism and management failure in NZ, and calls for the type of serious re-appraisal of our economic (and, therefore, social) model, much as many of us in the Labour Party are calling for."

Yes, love or loathe the guy, anyone who has read his columns consistently would know he's anything but a neoliberal. If anything, he strikes me as being of a relatively similar philosophical bent to, say, Brian Easton- although perhaps one who writes more about the business side of things. Certainly his pieces on public transport and the environment would bear that out.

In fact, if you sat down with him, I'm sure you'd actually find he may well agree with the thrust of some of what you say.

SPC said...

How many of the people can afford the milk and honey? Can New Zealand afford the market?

Leaky homes, the finance company crashes, the decline in r and d, asset and corporate sale to foreigners, high exchange rate and the property bubble and associated foreign debt are the products of the allowing the market to reign.

Our economic decline pre 1984 was a consequence of terms of trade (lower returns for meat, wool and dairy) exacerbated by the UK moving into the EU. Frankly our comparative advantage was/is in natural resource products that were a declining share of the global economy (only reversed by rising demand pushing up prices - that is now occurring).

Despite the currently improving terms of trade we have a problem living well of this comparative advantage because of population growth.

New Zealands relative wealth in the world is not that influenced by our economic model - central state ownership and planning or market. We would do better not choosing betwen them and avoiding ideology when deciding each option based on relative merits.

Anonymous said...

Perhaps Mr Oram is saying that it is the capitalists that are responsible for economic failure; surely the government lost control of the economy in the 1980s.

The Ministry of Works was created out of separate spending votes that all used loan money. This fact actually allowed the Treasury to get in with some petty cost-cutting each year. Of course, eventually it was easier to do away with the organisation, and now we don't have a 'reconstruction' agency. Also, the Housing Division of the MOW was not a successful amalgamation, all its innovative urban planning was from before becoming part of Semple's empire. Of course, it was especially susceptible to Treasury's razor.

Wasn't Tom Scott to blame for the lean on the shovel stereotype?