Friday, 9 January 2015

2015 - 2017: A Struggle For Time And Power.

Holding On versus Climbing Up: Securing a fourth term for National will require every bit of John key's indisputable political skill. Andrew Little will need all that skill and more to propel his Labour Party into office. Between 2015 and 2017 political life will be defined by this complementary struggle for Time and Power.

JOHN KEY owes a lot to Helen Clark. Indeed, it is now a commonplace among political analysts that a large measure of the present Prime Minister’s success is attributable to the careful study he made of his predecessor. Few would deny that it was time well spent. The politician wise enough to be taught is generally only bested by the politician who determines to keep on learning.
 
Helen Clark was an incrementalist politician: making haste slowly in the manner of the Roman general Fabius Maximus. Mr Key is also a Fabian. Not in the sense of being a member of the British Labour Party’s celebrated think-tank, but in the manner of a political leader who, by keeping his changes small enough for the electorate to swallow, reduces greatly the risk of them being violently regurgitated.
 
A lot of little changes, eventually, add up to quite a few very big changes. The keyword being “eventually”. Apart from political power itself, the element most crucial to the success of a Fabian strategy is time.
 
The political struggle of the next three years will, therefore, be for Power and Time.
 
Mr Key knows that if he succumbs to the temptation to ram the big changes demanded by National’s increasingly restive right-wing down the electorate’s gullet, then not only do they risk being regurgitated, but he and his party will also find themselves out of time and out of power. Somehow, Mr Key must persuade his more ideologically-driven colleagues to remain patient. (In the warm glow of the latest poll results, it’s difficult to see the latter formulating a radically different strategy with any hope of success!)
 
The Leader of the Opposition’s, Andrew Little’s, first priority over the next three years is Power – i.e. winning the 2017 General Election. To succeed he will have to study carefully not only what his National opponent has done right between 2006 (the year John Key became Leader of the Opposition) and the present, but also what his own Labour Party has done wrong.
 
At the core of this course of study lies a cluster of brutal facts about the twenty-first century New Zealand electorate that every aspiring prime minister must grasp.
 
The first fact to grasp is that, at present, the ideology of neoliberalism faces no serious challengers. The neoliberal view of the world, a world of sovereign, self-interested individuals and free markets, is the majority view of the New Zealand electorate.
 
The second brutal fact (closely related to the first) is that the neoliberal world-view cannot be contested successfully from any position other than that of full state power. In other words: to end neoliberal ascendancy in New Zealand a centre-left political party must first become the Government. It cannot be done from Opposition.
 
The third brutal fact is that twenty-first century elections in New Zealand are not won by policies based on reason, but by the timely apprehension and effective exploitation of a public mood for change. This will be driven almost entirely by the voters’ emotions.
 
The final brutal fact about the electorate is how little stock it places in the opinions of scientists, artists, journalists or, indeed, the life of the mind generally. With the notable exceptions of books, magazines and television programmes about sport, property, cooking and celebrity culture, it reads and watches very little of substance and displays a distressing lack of introspection or curiosity concerning the wider world. It is in love with twenty-first century technological civilisation and rejects utterly the idea that it might be unsustainable. On the plus side, the New Zealand electorate is confident, generous, rates itself highly and will not be preached to or patronised by anybody (especially politicians!) who reckon they’re better than everyone else.
 
Nobody in New Zealand politics has a firmer grasp of these salient facts about the Kiwi voter than John Key. By the same token, no Labour or Green MP possesses the slightest chance of becoming Prime Minister until they’re ready to place Mr Key’s political insights at the heart of their 2017 election strategy.
 
For those on the left of New Zealand politics it means shutting-up and letting Andrew Little and his team play for power in the only way that holds out the prospect of victory.
 
And after victory? All in good time, Fabius Maximus, all in good time.
 
This essay was originally published in The Waikato Times, The Taranaki Daily News, The Timaru Herald, The Otago Daily Times and The Greymouth Star of Friday, 9 January 2015.

37 comments:

Steve Alfreds said...

And that seems to be exactly what Andrew Little is planning to do. The perfect example is a capital gains tax. While it makes perfect sense economically he knows he won't be able to sell it to the electorate (or should I say middle class voters) before 2017 and so he's put it on the back burner. Steve Alfreds

Anonymous said...

"On the plus side, the New Zealand electorate is confident, generous, rates itself highly and will not be preached to or patronised by anybody (especially politicians!) who reckon they’re better than everyone else."

Oh please. They're stupid bigots who deserve the mire they're voting themselves into.

Time to withdraw civil co-operation methinks. Good luck trying to get me to report crimes, or anything like that.

Guerilla Surgeon said...

You know what, for the 1st time I can't find anything to disagree with. Particularly salient is the last brutal point about the New Zealand electorate. It does tend to run solely on emotion, ignoring science in particular.

Anonymous said...

I totally agree with this piece. Andrew Little may well do it.

J Bloggs said...

All I have to say is "Hear Hear"

Jigsaw said...

The electorate does what it does-you can feel superior, it makes not a whit of difference. People vote the way they do for an almost infinite variety of reasons each one perfectly valid for the person and a mystery to others. The left can feel superior but just feeling that way will never win them an election.

peterpeasant said...

what ever happened to that OECD report on neo liberalism in NZ?

Richard Christie said...

And after victory? All in good time, Fabius Maximus, all in good time.

Heh, I fell for that line for at three elections while Clark led the Labour Party.

Neoliberalism wasn't rolled back one iota over the period of her administration. Checked maybe, but not rolled back, not one bit.


It's a good part of the party's current woes that so many, being thrice bitten, refuse to return to the fold until a concrete commitment to end this nightmare is made.

pat said...

observant...... but other than than John Keys early demise or a rush of blood to the head of the hard right of National you appear to offer no active strategy to instigate the required change of government...unless waiting for the general public to get bored is a strategy?

Guerilla Surgeon said...

Being realistic about the way people vote is not necessarily looking down on them. We all have unconscious triggers which guide the way we vote. Even you jigsaw.

Victor said...

A factor largely missing from your otherwise shrewd analysis, Chris, is the impact of the economy.

The Clark/Cullen government presided over a broadly (if not wholly) benign phase of the business cycle, in which many (perhaps most) New Zealanders experienced a degree of prosperity.

Government was not primarily responsible for this benign phase. But it could easily have stuffed matters up and didn't! Moreover, it used the tenuous space granted to roll back some of the worst excesses of the neo-liberal hegemony of the previous 15 years.

We don't know for sure what Clark/Cullen would have done in response to the full, cumulative onslaught of the GFC. But we do know that recessions provide an opportunity for creativity to governments willing to make use of the cheapness of credit and to act counter-cyclically.

Perhaps a fourth term Labour government would have edged leftwards and commenced the repair of our increasingly tattered infrastructure and what's left of our welfare state. But, there again, perhaps not.

For National, the GFC raised different issues. To the neo-liberal purists (and to many unreflecting right-of-centre loyalists), recessions simply prove the case against bloated state finances and hence the need for sharply slashed budgets and a reduced economic and social role for government.

That this view is pure hokum is, of course, irrelevant to its wide currency or to the brownie points you can score with the markets through its constant iteration.

But there were some reasonably economically literate people on the right (e.g. Bill English and at least some of the guys in the boardrooms) who understood, for example, the role of "automatic stabilisers" as well as the dangers of a collapse in demand and of runaway deflation.

And so, when newly installed in office, Key would have been given advice that chimed-in well with his own inherent caution. At the same time, though, he would have been aware of the build-up of pressure on the right for more fundamental change.

If recent growth rates were to continue, Key's perceived success in weathering the economic storms that have devastated the likes of Greece and Ireland might suggest a continuance of the comparative moderation of the last six years.

Again, it's largely irrelevant to the argument, that it's primarily the cornucopian Chinese market and the strength of the Aussie banks rather than Key's fancy footwork that helped us through. In Smile-and-Wave land, perception is reality.

But all the signs are that the economy is slackening and the only significant question is just how far that slackening will go.

China's growth is certainly slowing (at least for the moment) and the fall in oil prices is both symptom and promoter of global economic weakness, despite the resilience of the US recovery.

Locally, we're faced with weak dairy prices and an economy more than ever dependent on real estate bubbles for even a semblance of prosperity. These are truly, "the years that the locusts have eaten".

So the chances are that the siren songs of the budge-slashers will grow ever more strident and desperate. Either Key will have to listen to them or he'll be retiring to Hawaii a mite earlier than expected.

But could a more right-wing National-led government win a fourth term, particularly against a background of clear economic dysfunction?

Frankly dunno! Over to Mr Little et al! I'm off to the garden.

Loz said...

The essay has echoes of Jim Anderton’s often used line that one bad day in government is worth more than a thousand good days in opposition. It was the justification as to why the Alliance couldn’t criticise the neoliberal economics of Labour in the 1990s, and in doing so, the electoral understanding of why Alliance existed inevitably melted away. In fact, it’s the same position that was heard by the rump of the left in Labour at the end of Rogernomics. The policies rammed down the throat of the electorate may have been completely incompatible with Labour’s historical purpose but desperate activists appealed for continued support, purely on the basis that “at least it’s better than National”.

A brutal fact is that for thirty years New Zealanders have been subjected to an un-changing economic monolog from both parties. With such a broad consensus between Labour and National on economics the only place where difference has been possible has been for “the left” to ritually flog identity politics as a bizarre form of self-flagellation, completely unpalatable to 99% of the country.

We should remember that politics and economics are completely entwined… to the point of being exactly the same thing. Suggesting that neoliberalism “has no serious challenger” is as much a statement of politics as it is economics. If this were actually true than we should all embrace the creed. Thankfully, it isn’t a fact at all. The ideology of neoliberalism does have a serious challenger with the “ideology” of democracy. Forty years of neoliberalism has been about dismantling all democratic processes that shone a light onto decision making and mandated the betterment of New Zealanders over the predictable self-interest of powerful individuals. Democracy affirms the inalienable rights of all citizens. It affirms the supremacy of a collective voice and conscious determination over the interests of wealth. Democracy is the serious challenger to neoliberalism.

Unfortunately, unlike the coup-de-tat of the New Right (that could be enforced on the populace by eliciting the support from the most powerful interests in society), a revival of democracy can only grow (and slowly) with the conscious support of the people. Ending neoliberalism “by first becoming government” is an oxymoron that’s far more likely to produce a re-run of the age-old “dance to the centre” instead of any real change in the status quo.

Another brutal fact is that the almost tribal identification and steadfast support that Labour enjoyed for decades no longer exists.

If the Labour party can’t identify any fundamental differences between itself and broad policy prescription of neoliberalism how could sectors of the nation ever hope to build an affinity with its message? Political affiliation has to be more than a momentary acceptance of one party colour or another yet the ongoing suggestion is that elections are nothing more than brand awareness and product positioning.

Loz said...

I do not believe that the country does accept that deregulated corporations have demonstrated any benefit for the welfare of New Zealand people at all. Ask Cantabrians about Insurance firms or any home owner about the banks! After decades of both parties maintaining the same prescription for the nation is it any wonder that younger generations find concepts of markets easier to grasp then the concepts of democratic systems that they replaced? Does this really signify that the only prospect of an electable Labour is to continue the neoliberal argument? Do we really believe that a dismantling of regulation and controls is what New Zealand needs or do we really need a voice to actually say that a reduction of wages, working conditions, job prospects are the inevitable result.

There is something very wrong with New Zealand. As always, prosperity is just around the corner but never materialising. Tens of thousands of kiwis are poised to return from Australia as they have no access to support as the Australian market is potentially entering a long term contraction. Quite apart from the fact that Australia is New Zealand’s most important trading market, international investors view NZ as an extension of the Australian sphere. The inflation of the housing market, driven by the same speculation that has always resulted from deregulation, is matched by ongoing increases in rent that represent an increasing drain on the wealth of this country that will last for decades. We don’t need an acceptance of neoliberalism, we need an opposition to it and a party to point out how terrible this experiment has been for the nation.

Kat said...

"unless waiting for the general public to get bored is a strategy?"

Unfortunately Pat, that is the Kiwi voters modus operandi when it comes to voting govts in and out.

The Key administration is just a long intermission between the real reality. As opposed to the 'reality show' mentality that has prevailed for some years now.

Anonymous said...

Your post is very pro John Key. He glows in the poll results does he. Well that is because the sheeple are blind. All they see is his smile, and don't seem to think past that or to question anything that the man does.

Little doesn't have a hope. Key will get his third time, his Knighthood, his flagchange and his vainglorious place in history.
Why do u love him so much?

Anonymous said...

The point is that outside events in the world could intrude on a totally disinterested political class and Key. NZ is delicately poised between its traditional and little understood friend and the military dictatorship of China which even bans You Tube and exectutes thousands of supposedly criminal. The interesting thing about 1983-85 period is that the idea of a nuclear ships ban had only to be introduced by a few simple speeches and the political and bureaucratic class were completly unable to cope.
At the moment we have falling milk prices, a growing crisis over the Ukraine with delicate negotiations over two near complete Russian aircraft in French ports with Russian crews on stanby and a growing collapse of order is Syria and Iraq and the end of the possibility of a two or one state solution for Palestinians. The various releases of the day of truth by Greenwald and various disaffected soviet agents may return to haunt ole twinkle toes Key and his chief commissioners English, Joy

Jigsaw said...

How is saying that the NZ electorate 'ignores science in particular' in making it's electoral decisions not looking down on the electorate? Where is the evidence that they 'are looking down on science' anyway?
Following the recent election that was much chatter from the left to the effect that the electorate
was 'stupid' for voting the way it did. Plenty of examples.

Victor said...

Loz

As per normal, I find myself in substantial though not absolute agreement with you.

You write:

"There is something very wrong with New Zealand. As always, prosperity is just around the corner but never materialising"

So can real prosperity materialise here on the basis of economic policy changes alone, desirable though such changes might be?

Wayne Mapp said...

So you accept that neo-liberalism is the prevailing orthodoxy and has the support of the majority of New Zealanders. So at least to some extent an incoming government will have to accept this reality or else it won't win.
But then you seem to say that from within govt the whole neo-liberal edifice can be overthrown. Sounds a very duplicitous approach to winning elections. Somewhat akin to 1984 except in reverse.
The difference being is a new Left govt would probably be going against the world trend, as opposed to going with it.
The best example of this is the 1972 Kirk election, still beloved by the Left (and I suspect you), but it only lasted 3 years. I appreciate that the 1973 oil shock was part of the cause of the defeat, but I well remember the anger of middle New Zealand against the excessive controls of the 1972-75 Labour govt. It was the reason they voted in droves for Muldoon.
Helen Clark is a much safer model for Andrew Little. As you rightly state John Key was a very keen observer of how she managed things, and how she had an incremental approach to govt - evolution, not revolution.
And I am sure Andrew Little will go for a successful model that is likely to deliver sustainable govt, not a 3 year burst. This might mean marginalizing the Greens - will Winston Peters become Andrew's best buddy?

Guerilla Surgeon said...

Wayne: Neoliberalism has the prevailing orthodoxy amongst politicians and economists. Much of the general public wouldn't know it from a hole in the ground.

Jigsaw: Now how many times even in just these columns have I said "research shows that........." and been cheerfully ignored. The level of science education amongst the general public is abysmal, as shown by the huge uptake of quack medicines, new age cures, and the lack of belief in global warming, though that particular piece of idiocy has a right wing phenomenon. It is almost impossible to get any decent science-based legislation passed in this country. Largely because politicians tend to say "I want to do so and so – find me some research that agrees with it." :-), But also because there are a number of very vocal people who make large amounts of money selling quackery. And naturally, the money must come first. Not to mention the growing trend amongst the chattering classes to not vaccinate. The prevailing view seems to be that anyone's opinion on science is as good as anyone else's. Ignoring the fact that 99% of the opinions are un-or misinformed. And if that means I'm looking down on someone, so be it.

Charles E said...

I don't see what is neo about the liberal world we are blessed with. What is wrong with liberty?
An antonym for which could be islam, meaning submission I believe.

And so you propose Labour fools the fools who are the voters and then once in power unwraps its anti-liberal agenda which all will have to submit to?

May not even last 3 years, unless it was in coalition with the Greens only, who also would be quite happy to only get elected once, as long as it was permanent, i.e. the last free, liberal election.
Well it is just a bad dream, because we Kiwi voters are not fools. Indeed collectively we are a clever crowd, as beautifully demonstrated by the last election where we refused to be hijacked by crooks and the rabble left of Labour.
Labour can be elected again by us, but only if they reduce the Greens to the irrelevant rump they should be and do a deal with NZF. Yes I know, yuk! But there are a few voters who are fools, I admit.

aberfoyle said...

Run left.Who are you,me im working here,my employers have to say you have been stealing from then.

That sentiment i doubt Andrew,posses,but you never know.

Guerilla Surgeon said...

Er.... neo means new Charles. It was originally a reaction to classical liberalism, but the meaning has shifted and now it means extreme "liberalism". Now I don't necessarily agree with the term liberalism in this context. Personally I would prefer radical conservatism. But we seem to be stuck with what we have. I'm pretty sure that it doesn't mean liberalism in the sense that you are using it. These days it means an attempt to redistribute income upwards, and trying to eliminate the concept of the public good. People's freedoms are constrained not necessarily by the government, but by their economic circumstances. And of course buy whatever laws are necessary to protect the "rights" of corporations. If the TPP comes in we will see a lot more of this :-). It leads to crony capitalism with all the excesses that entails. You will only enjoy Charles if you are crony. Which I somehow doubt, or you'd be too busy to be writing stuff on this blog.

Charles E said...

I agree GS (hell I must be ill!)radical conservatism would be a better term for me to understand.
I was a supporter of Thatcher when young and living in London, but even so I knew she was not a true blue conservative. She was a radical, almost a revolutionary, and the one truly defining quality of a conservative is their abhorrence of revolution or even just partially revolutionary policies.

But coming back to NZ, the last time we had a radical, revolutionary aspect to a government was Lange's lot who did violence to our formally conservative governance, both in economic and foreign policy. The sudden anti nuclear policy was just spite and vandalism. It should have been only directed at nuclear weapons. Nuclear power was and still very much is a lesser evil than fossil fuelled power. Lange just hated the US.

Today we have a liberal conservative government and leader, not radical at all. Many similar governments exist around the globe. UK one other.
So this label, neo-liberal or neo-conservative is redundant, history.

Loz said...

Victor, you ask if real prosperity can materialise as the result of economic policy alone. I don’t believe that economics can exist independent to a political philosophy… after all, it isn't wise to introduce economic change without first subscribing to a belief in which group are responsible for creating wealth, innovation and prosperity in the first instance!

Does prosperity eventuate from the removal of imposed regulations and creating an environment most favourable to the entrepreneurial class? Alternatively, are the economic interests and quality of life of most New Zealanders protected through the regulations that have been eroded to support the neoliberal philosophical model? These are core question of philosophy. There appears to be a fundamental problem when the prescription for prosperity involves permanently reducing the incomes of salary and wage earners while simultaneously shifting the tax burden away from the most wealth “go-geters” amongst us.

Economic policy is always about empowering some groups at the expense of others. Neoliberalism subscribes to the view that value is produced by the entrepreneurial go-geters when they are unshackled from collective regulations and responsibilities. If you don’t start from this philosophical premise the actual policies don’t make any sense.

As such, economic policy can never realistically be considered as standing alone from social policy, environmental policy or social justice.

New Zealanders have never shown an acceptance of the neoliberal philosophy. For Labour to remain tacitly in agreement with the philosophical model commits the 2017 election to be yet another lacklustre and contrived choice akin to Coke vs Pepsi. The bigger electoral question is likely to be “why bother” if Labour can’t identify the fundamental flaws in our current economic direction.

Guerilla Surgeon said...

How on earth Charles can neoliberalism be history, when governments – particularly Conservative governments believe in the minimising of government involvement in providing services, and in the economy at large? Conservatives just about all believe in this, and Labour governments just witter about at the edges. The British government in particular in Europe at least, is quite rabidly neoliberal. They, like many governments in America believe in starving the public sector of funds, claiming it is inefficient, and then privatising it. That's neoliberalism. Or radical conservatism if you prefer.

Victor said...

Loz

"As such, economic policy can never realistically be considered as standing alone from social policy, environmental policy or social justice."

Agreed. But perhaps my question wasn't properly articulated.

Let me rephrase it: Does New
have the wherewithal to deliver sustained prosperity to its people?

I'd obviously like to think so but I'm not sure that even the best formulated social, economic and environmental policies can counter-balance the objective realities of geography, demography and lack of outstanding competitive advantages.

I suspect you take a more optimistic view than I over what policy alone can accomplish but I might be wrong.

peter petterson said...

You give Key far too much credit, when it is own advisers within National and across the ditch with Textor and Co who advise his time as PM.

Loz said...

Victor: We know categorically that a deregulated economic system will always, as its first priority, increase the amount of disposable wealth held by investors. A neoliberal (or classical) argument is that the increase of wealth ownership amongst the already prosperous is actually the "rising tide that lifts all boats". The argument is that the overall wealth of the system as a whole increases at such a rate that the material prosperity of everyone increases... albeit at different levels. After 30 years of deregulation there is plenty of evidence to show that this isn't the case and the increasing wealth at the top of the spectrum is occurring at the expense of everyone else.

There are scenarios where seemingly prosperity can be felt throughout the community without a large increase in the production of goods itself. One being when the entire system becomes inflated with rising debt... this is certainly what happened prior to the GFC and it’s certainly a factor with the housing market today. In hindsight, periodic releases of wealth into the NZ economy over the past 20 years have occurred largely on the back of the system being inflated with cheap credit... not the formation of new industries or a decrease in indebtness. The trajectory the country is on cannot delivery prosperity to New Zealanders without relying on record prices for primary exports or foreign demand fuelled by accelerating system wide debt.

New Zealand will not become a prosperous, high-wage economy without a macroeconomic strategy of diversifying what’s produced, regulating against excessive profit taking and reducing the foreign extraction of wealth from the national economy. There are lots of ways to do this but none of it could be seen as being just a shift in economic policy… it represents major changes in policy that can’t simply be imposed as part of a centralised legislative agenda.

In 1985 Labour’s reasoning with adopting neoliberalism was that the nation would “trade its way out of debt” as a result … it has never worked. If the oft’ used definition of madness is doing the same thing over and over and expecting a different result, expecting neoliberal ideas to deliver prosperity to New Zealanders fits that description nicely.

Victor said...

Loz

"There are lots of ways to do this but none of it could be seen as being just a shift in economic policy… it represents major changes in policy that can’t simply be imposed as part of a centralised legislative agenda."

Here we come to what seems to me to be the crux of the matter.

To understand your argument, could I please ask you to exemplify some of the major changes of policy you have in mind.

Everything else you've written makes perfect sense.

Anonymous said...

John Key's achilles heel is South Canterbury Finance. The process was a farce and the real fraud was perpetrated by the ones doing all the accusing and pointing all the fingers. Key's own immediate next door neighbour in Parnell pocketed over $100 million from the sale of just one of the assets he purchased from the receivers alone. David Cunliffe pledged a full judicial inquiry into this whole scam on 24 November 2011. Andrew Little should grow a pair and honour that promise. It will bring Key's house of cards down once and for all as well as expose the extent of the corruption and abuses of power which have prevailed in the government under the current regime. Labour lost my vote in the last election for failing to challenge this kind of crap. As long as they remain so risk averse they deserve to remain in opposition and Key deserves to get away with fleecing the financially illiterate and easily manipulated public.

Guerilla Surgeon said...

Hmm. "Where's my high wage economy?" Has been around almost as long now as "Where's my flying car?"

Loz said...

Victor,

Neoliberalism by necessity requires rigid controls that provide no avenue for challenging power structures. Ironically, corporate systems that now exist often embody the non-responsive, top heavy and bureaucratic systems that were claimed by the New Right to be the hallmark of the Public Service, but now the monoliths are purely run to extract wealth from the community.

The opposition to neoliberalism must be about providing mechanisms which encourage a plurality of interests to be openly voiced in all areas of decision making. This universal truism applies to all facets of life and I'm sure would be well received.

The entirety of the NZ Public Service has been running under corporate structures for thirty years that mandate outsourcing to private firms where possible (regardless of the cost and service impact). It has enshrined the unchallengeable decision making of chief executives and professional management in a culture of secrecy veiled by “corporate sensitivity”. A half century ago health boards comprised of 12 medical professionals and one administrator (to write the minutes)… now we have 12 administrators and one medical representative. How different would the whole of the Public Service perform if at least half of the managers and administrators were replaced by front-line professionals responsible for devising their own structures and priorities of public charters? I know the result would be far more effective and much cheaper to run. The recent Victorian election also showed that regardless of public sentiment toward unions, the electorate holds Teachers, Nurses, Firefighters and all other front-line public professionals in the highest of regard… much higher than the faith held in corporate managers or financiers.

The 1980’s Public Service reforms had as much to do with muzzling warnings from within the ranks than any efficiency or responsiveness agenda.

There are some really great initiatives that have been very successful in other parts of the world. All German industries require employee representatives on their boards and regular "worker committee" meetings within the firms. The mechanism is ideal for ensuring that all staff can have an effective voice in the workplace. Bolivia allows in legislation the Earth to be represented as a claimant for legal suits and although the Earth can't be compensated for wrong doing in cash, it can be compensated through the enforcement of environmental clean-up and remediation. In this sense, even the environment can have a voice.

In Spain, the world’s largest collective had 80,000 staff members. Decisions on investment have prioritised labour intensive initiatives in recognition that the most important element I to have everyone in meaningful employment – not profit maximisation. Local “bodies” are open for comment from all citizens as to where a few hours or days of labour may be of benefit to the community and resource is made available. There is no reason why our own unemployed couldn’t be reasonably engaged in meaningful endeavours identified by the community itself.

Empowering all elements of New Zealand to directly get involved with transparent decision making is a prerequisite in rolling back neoliberalism. It removes the secrecy requirements that have surrounded public institutions and the need for massive pay packets to be awarded to administrators when decision making is open for scrutiny.

Neoliberalism is a philosophy that cannot coexist within a democratic framework so the best challenge to the ethos is strengthening democracy itself.

Victor said...

Loz

Many thanks for a quite brilliant post, which I thoroughly enjoyed reading.

I totally agree with you. Institutional and cultural change are as necessary as new policy directions, which can't succeed without them.

But my question remains (however sensible our institutional, cultural and policy settings might become): Does New Zealand have the wherewithal to achieve prosperity?

You cite the case of Germany, which, whatever its current mild downturn, has had a very successful economy for most of the last 70 years, despite having been reduced in large part to rubble at the start of this period.

But Germany, of course, has a number of absurdly obvious advantages that New Zealand lacks, viz: population, a very highly skilled workforce, markets close to home, globally recognised brands and a well deserved reputation for quality products.

At an earlier point in this period, it also drew lasting advantage from coal and iron ore, two commodities it had in profusion.

Now, I certainly agree that Germany's Governing Board system has helped its major companies make sensible decisions, characteristically based on a broader range of factors than just the health of a single year's balance sheets.

I would also agree that Germany's been served well by cooperation between managers and unions, by strong regional institutions and by the perceived role of bankers as facilitators of long-term profitability.

But would such institutional and cultural factors have had the obviously benign impact they've had without there being something to sell and someone to buy it?

So, returning to your post, I agree with you that our economy would almost certainly perform better than it does at present if the changes you've advocated took place.

But is that the same as saying that we'd be on the road to prosperity, as perceived of by people in most advanced, industrial economies. I have my doubts but would be over-joyed if you could confound them.

Loz said...

Hi Victor,

Surely prosperity is a state when human beings may thrive in the absence of hardship, and want, while the future appears at least as rewarding as the conditions of today? I make the distinction because we often use the term narrowly in a context of accumulating wealth when it’s really a broader statement about social conditions and general quality of life. In that sense, it’s difficult to imagine a prosperous nation without comprehensive social services and regulations protecting the wellbeing of its citizens.

Comparing New Zealand to Germany is fraught with problems for the reason you mention. Better examples in terms of population and raw resource might be Finland or Denmark. Both nations have a similar population to New Zealand. Major exports for Finland include forestry related products (paper, pulp and timber) while the export of food is major component of Denmark’s foreign trade. Unlike New Zealand, Both Finland and Denmark have strong local government with local community directly participating in the provision of social services and education. They both have high union involvement, high levels of social mobility, universal healthcare and free education. This probably has something to do with why 41% of Finland’s 20-29 year old age group is enrolled in full time education with Denmark not far behind with 39% enrollment. Both nations have managed to develop high-technology sectors, no doubt fuelled by the education system.

Neoliberalism suggests that the path for developing GDP and prosperity is through reducing the role of government and increasing volumes of trade into foreign markets. An economic indicator that disputes this idea (and is never mentioned in New Zealand) is the Economic Complexity Index.

The Economic Complexity Index is a measure of exports in terms of the skill required for their production or the local added value. The index shows a clear correlation between increased GDP and the level of complexity of export products. To be economically prosperous a nation must add value to exports as refined products instead of exporting basic commodities themselves. There couldn’t be a more stark difference between New Zealand and the Scandinavian states. Norway and Denmark score amongst the highest ranking nations on the planet for adding complexity to their exports while New Zealand is amongst the worst. Rough wood is one of New Zealand’s top 5 export products while Finland’s top 5 exports include sawn wood, coated paper and uncoated paper. This understanding is what Labour used to consistently highlight before it was captured by neoliberalism in the 1980’s.

The real question then, is if stronger democratic structures, social mobility, government planning, free education and union participation have aided in the development of added value industries. I believe there is good evidence to suggest they have.

There is another importance to invigorating democracy in New Zealand. It is important to focus on growth but there is an extreme threat that the country (and the western world) is facing economic and environmental collapse. The collapse of the banking sector in Iceland during the GFC, certainly due to deregulation, was met with the demands for austerity and public bailout for private investors from Britain and the IMF. It was only as a result of a democratic mandate that the nation was able to reject the demands of foreign investors and actually weather the storm that had been unleashed. Real democracy remains the only form of resistance to neoliberal power structures.

Principled and engaged democracy is the only serious challenger to the neoliberal world view but it’s been without a voice for many years. Any future success for Labour must be on providing that voice instead of accepting the tired neoliberal ideas that have delivered so little over that time.

David said...

Based on this analysis of the electorate ie one that offers no hope, it sounds to me like New Zealand is primed for a violent revolutionary movement.

Victor said...

Hi Loz

I've just caught up with your latest comment.

We are virtually of one mind except that I think that what you are suggesting requires a simply vast cultural and psychological change.

It would be the work of many years.