Wednesday 19 August 2015

Little Big Man: Who Is Dr Bryce Wilkinson - And Why Should We Care?

Bryce Who? Small and unprepossessing, smiling his grandfatherly smile, Dr Bryce Wilkinson would be passed, unrecognised, in the street by 999 out of 1,000 New Zealanders. And yet, unelected, and largely unknown outside the neoliberal elite, this little man has left a very big impression on our country.
DR BRYCE WILKINSON can make a reasonable claim to have written the book that launched neoliberalism in New Zealand. The name of that book was Economic Management, and although its official author was the New Zealand Treasury, most historians agree that the book’s guiding intellect was Dr Wilkinson’s.
Economic Management knitted together, into what amounted to a detailed manifesto, a raft of radical economic measures that had been worked out in “Economics II” – described by Te Ara, The Encyclopaedia of New Zealand, as: “a think tank in the Treasury in the late 1970s and early 1980s.”
Economics II was staffed by young economists who had studied at universities in the United States where the monetarist theories of Milton Friedman, and the ideas of neo-classical economics generally, were already well-entrenched. Along with Dr Wilkinson, Treasury’s “think tank” included Graeme Scott, Rod Deane and Roger Kerr – individuals who would go on to play pivotal roles in the execution and consolidation of the neoliberal order in New Zealand.
When the Labour Party was swept into office at the snap election of 1984, Economic Management was waiting for them.
“But, wait a minute!”, I hear you object, “Since when does Treasury supply New Zealand’s political parties with ready-made manifestoes? Didn’t Labour have a manifesto of its own in 1984?” Indeed it did – but not the sort of manifesto in which anyone could place much confidence.
Though the public were not told, Labour’s manifesto was a hastily-cobbled-together mish-mash of the policies advocated by Labour’s left-wing dominated Policy Council, and the ideas emanating from the faction in Labour’s caucus led by Roger Douglas and his fellow “reformers” Michael Bassett, Richard Prebble, Mike Moore and David Caygill.
So extreme were the ideas of Douglas’s faction, and so hostile to Labour’s traditions, that a new faction was summoned into existence to fight them. By May of 1984, this latter group was circulating a document posing a radical left-wing alternative to the right-wing measures being fed directly to Douglas and his followers by their special Treasury adviser, Doug Anthony.
Had the Prime Minister, Sir Robert Muldoon, fearing a loss of his parliamentary majority, not called an early election on the night of 14 June 1984, it is fascinating to speculate as to which of these two, diametrically opposed, factions would have triumphed. An election held at the usual time, in November 1984, would have given Labour four more months (and an annual conference) to decide its future direction. Denied that time, the contending factions were persuaded to let David Lange’s deputy, the former Law Professor, Geoffrey Palmer, compose a manifesto both sides could live with, but which, as a reliable guide to the party’s future conduct in government, was next to useless.
Labour’s Bastille Day victory ceded the political initiative to Douglas’s faction. That the country was said by the Reserve Bank and Treasury to be in the grip of a “financial crisis” contributed hugely to the Right’s ability to control the course of events. Precipitated by a policy paper outlining Douglas’s determination to devalue the NZ dollar by 20 percent (which somehow ended up in the hands of the news media), the “financial crisis”, and the new government’s decisive handling of it, brought the Left/Right policy debate to an abrupt (if only temporary) end. It would be Dr Wilkinson’s Economic Management which set the course for what would later be called “Rogernomics”.
Readers of Bowalley Road born after those heady days in 1984, and thus played no part in the great struggle for Labour’s heart and soul that raged from July 1984 until the ejection of Mike Moore from – and the elevation of Helen Clark to – the leadership of the Labour Party in 1993, have been supplied with this brief sketch of the role Dr Wilkinson has played in New Zealand’s recent history, so that they can put his statement on foreign investment and racism, released earlier today (17/8/15) into some kind of context.
Commenting on the KPMG report showing China to be only the second-largest foreign investor (after Canada) in New Zealand (excluding residential property) Dr Wilkinson is reported as saying that “the report tackled many New Zealanders’ fears that China was buying up land, farms and businesses.” Anxiety about China was producing a “silly defensiveness” he said, adding that “racist attitudes and red tape were making New Zealand one of the most restrictive regimes in the world”. According to Dr Wilkinson: “We should be much freer and more open to the rest of the world and that helps New Zealanders get a better price for their assets which means they can invest more in the rest of the world themselves.”
More free and open! Such is the prescription of the man who, along with his colleagues from Economics II, persuaded the fourth Labour government to transform New Zealand into the most “free” and “open” economy on Earth. The man who urged on the sale of public assets to “foreign investors”, who were then free to repatriate the billions of dollars of profits extracted from them to their new owners offshore. The man who now calls those attempting to keep what remains of New Zealand’s assets out of foreign hands “racist”, but whose policy of preparing state-owned entities for privatisation saw tens-of-thousands of Maori forestry workers, railway workers and construction workers thrown out of their state jobs – leading to the disintegration of whole communities and the fracturing of whanau.
Small and unprepossessing, smiling his grandfatherly smile in the group photos of the New Zealand Initiative (successor to the now defunct Business Roundtable, which for many years was run by another alumnus from Economics II, Roger Kerr) Dr Wilkinson would be passed, unrecognised, in the street by 999 out of 1,000 New Zealanders. And yet, unelected, and largely unknown outside the neoliberal elite, this little man has left a very big impression on our country.
I’ll leave it for you, the reader, to decide whether it has been for good or ill.
This essay was originally posted on The Daily Blog of Monday, 17 August 2015.


Guerilla Surgeon said...

An interesting take on the 'middle ground' hypothesis. A little different to the Guardian's usual Condemnation of Corbyn.
Little man certainly describes Wilkinson. They were all little men, particularly with regard to empathy and consideration for others. Human beings? Pfft – just stock units :-).

Patricia said...

Chris is that a spelling mistake in the fourth to bottom para? Williamson and not Wilkinson

greywarbler said...

Unprepossessing for sure. Dr Wilkinson looks alert, intelligent and wise.
Looks are only skin-deep though, we have been told, so truly. Two out of three is not enough. Your ire is showing Chris, mine and now how many others?

At least the French had Bastille Day to commemorate their a national gamechanger. What day would we choose to commemorate the start of our regression into colonial poverty? When our world started untangling not with a bang but a whimper. Can we still save something without major bloodshed? The ire of the RW showed when citizens prevented an international ball game with menace, batons, bloodied heads, and riot gear deployed. We have had Tuhoe raided after invasive surveillance found a scenario as an excuse for heavy police action. A practice for the real thing?

Octopus nation sucks at us with its trained economic academics, its friendly military maneouvres on our soil, its unfunny Sancho Panza riding its kangaroo urging us on, its war adventures to which we are invited, its dominating currency and IT, its policies delivered at conferences attended by the world, its racist and violent methods transported in the goodie bags we have pressed on us. What a black hole of a cornucopia yawns in front of us.

peteswriteplace said...

A most interesting and correct overview of the 1984-90 Labour Govt. Do any older readers remember Roger Douglas' booklet published in opposition "There has to be a better way" ? Bill Rowling wasn't impressed and sacked Roger Douglas from his economic spokesmanship.

Unknown said...

I expect this little minded man thought he was doing good. So did the little German with the moustache and his equally nasty Russian rival. To inflict pain on the innocent for any ideological reason dehumanises victim and perpetrator. Have no doubt Wilkinson stands convicted of crimes against his fellow man.

Bryce W said...

To set a few things right for the record:
(1) Economic Management was the work of many. It was the pooled work of many divisions, only two of which were economic divisions. My input related to areas that involved Economics I division, which was where I was the time. The central figure was Dr Graham Scott. He led and coordinated its production, oversaw its contents and structure and wrote some of the major sections himself. Murray Horn helped Graham pull it together. Graham reported to Jas McKenzie who was also a major intellectual force. Roger Kerr's role was seminal as head of Economics II division. But his team contained very impressive people pulling their weight. All in all it was an incredible team effort, having to be written in a few weeks because of the snap election, when public policy settings were unsustainable.
(2) Economics II at the time was staffed by some excellent young economists, but the only one that I can think of who had a recent US university education at the time was Rob Cameron. He studied at Harvard's Kennedy School as I recall. (He was on a Harkness Fellowship). The Kennedy School was not Milton Friedman's Chicago.
(3) Rod Deane was never a member of Treasury's "Think Tank". He was in the Reserve Bank.
(4) There was no special adviser called Doug "Anthony". Perhaps you meant Doug Andrew.
(5) Economic Management was not a monetarist document. If anything it reflected a Harvard/Yale view rather than a Chicago view. For example, it did not advocate target growth rates for M2, or any other monetary or credit aggregate.
(6) The foreign exchange crisis in 1984 was real. The outflow of cash in that last few months of Sir Robert Muldoon's administration was such that the Reserve Bank did not have the reserves left to defend the currency on the Monday after the election on any prudent projection of the likely demand. This was no figment of anyone's imagination. The notion you try to convey through double quotes of a contrived conspiracy theory is spin that is detached from this reality.
(7) Where am I reported as saying that "racist attitudes and red tape were making New Zealand one of the most restrictive regimes in the world"? New Zealand does have one of the most restrictive regimes (involving red tape) on the OECD's measure. (See chapter 3 of The New Zealand Initiative's 2013 report Capital Doldrums summarises international rankings of NZ's FDI regime, in particular chart 7 on page 25.) Fear of foreign influence does not have to be primarily racist. I made this clear in some of my interviews, but I don't know to what extent those components were broadcast. For the record, I don't think racism is a major factor behind NZ's regime. I doubt if it is even a material factor. Who in NZ would feel racist towards Australians, for example?
Bryce Wilkinson

Peggy Klimenko said...

@ Peter Petterson: " Do any older readers remember Roger Douglas' booklet published in opposition "There has to be a better way" ?"

Ha! Yes, I certainly do. Many of us were sceptical about his views even then. Not, of course, that many areas of the Public Service didn't need a bit of a kick up the arse at the time. But we were dubious about the long-term benefits of Douglas' policy prescription. And anyone who'd worked in the private sector knew that business was just as prone to inefficiency as the public sector. Human nature, I believe it's called.

@ Nick J: "To inflict pain on the innocent for any ideological reason dehumanises victim and perpetrator."

Quite so. And in order to justify that pain, the perpetrators must characterise the victims as "deserving" of the treatment meted out to them; the Jews of Europe would recognise the tactic.

Which is where we're at now: the undeserving poor, whose fault it is that they're poor, and have children they can't afford. Don't give them a liveable wage or a ditto benefit: it only encourages them!

Chris Trotter said...

To: Bryce Wilkinson.

My sincere thanks for your forthrightness in relation to the authorship of "Economic Management". Historians now have a much clearer picture of who did what.

I do suspect, however, that you are underplaying your own influence over the production.

We could debate with one another at length over the other points you dispute - but not in this format. All that I would say, here, is that even Roger Douglas's colleagues were convinced that the "inadvertent" revelation of his intent to devalue the NZ Dollar by 20 percent was anything but. That it intensified the foreign exchange crisis tremendously is, I think, indisputable. The crisis itself was indispensable to the success of what Peter Harris once called "the bureaucratic coup d'├ętat" that set Rogernomics in motion.

Jim Rose said...

Chris, you overrate the influence of Milton Friedman and the Chicago School in the 1970s and 1980s in the USA, New Zealand and Australia.

I happen to be in Canberra in the 1980s and early 1990s. If you mention the name Milton Friedman in a job interview, that would have been severely career limiting. He had just graduated from a wild man. Australia resisted even inflation targeting until 1996.

Edward Nelson wrote a very good paper a few years back pointing out all the different non-monetary that is, non-monetarist explanations for inflation in both Australia and New Zealand up until the end of the 1980s in New Zealand and the mid-1990s in Australia.

My education to honours and graduate level thoroughly Keynesian. Milton Friedman was never mention. Indeed if you wanted to find a textbook for macroeconomics that mentioned monetarism in any depth, it would be a long search in the 1980s, certainly the 1970s and even the 1990s.

As for FA Hayek, if you name dropped him at a job interview, and got any hint of recognition from the interviewing panel, you are clearly been interviewed by well read people.

Indeed, it is quite difficult to find obituaries of any length of FA Hayek, the so-called ringmaster of neoliberalism, online. Indeed, his son got much longer obituaries on the strength of his father's renewed popularity after the late 1990s.

Guerilla Surgeon said...
This comment has been removed by the author.
Guerilla Surgeon said...

Interesting who seems to read your column occasionally Chris. Or perhaps just secretly. Brian Easton however always maintained that if you DIDN'T mention Milton Friedman, you couldn't get a job at Treasury.:-)

Anonymous said...

Doug Anthony was the Deputy Prime mInister of Australia who was instrumental in developing the Australia NZ free trade agreement

Robert M said...

Most of the left seem to be under the illusion that Muldoon's New Zealand was a fully employed haven of love and peace. The actual truth was that in 1975-84 actual and disguised unemployment was high and the hard right views of Treasury, Wilkinson and Kerr et all were actually being implemented in some areas such as Transport, Rail and Public service employment policies. Large numbers of every sector of society could find work only on PEP scheme jobs which offer temporary work in the public service, local government and all sorts of community work. The railways were run as some sort of gigantic work scheme, much of it for the generally unemployable. At the level of graduate employment in about 1977-78 there was massive cutbacks in the number of graduate advisory officers taken on, and those that were in economic oriented departments like Transport and Trade and Industry started to be largely confined to those with hard qualifications in economics.
In terms of the alternative option to Douglas the so called A team idea, I don't think its wrong at all to regard the ideas of Jane Kelsey, Helen Clark or Ann Salmond to be heavily influenced by such Russian derivatives as Cuba and East Germany and neutral Finland I have heard plenty of medical practioners express admiration for the Cuban model of medicine. My view of Kelsey is not formed, by telepathy, or some rabid anti communism, she is obviously a women of the hard left and Wellington is a very left wing city, with architecture which is ugly and stalinist and housing policies of huge ugly and architectually designed council housing, which overload the council budget and maintain in the city a lot of working class population unsuited to a modern western society. I would suggest another attempt at a modern liberal market society would outlaw council ownership of flats in the main NZ cities and changing the flats by a mix of demolition, privatisation and transfer to housing association ownership, non public, but run by organisations that do not seek profit or share dividends.

Guerilla Surgeon said...

Robert what mishmash of bullshit and wrongheaded opinions. Yes of course Helen Clark was Stalinist. She was a dictator, there was no opposition party, she killed people if she thought they were plotting against her, and her economic policies stressed heavy industry and that the government should run the means of production distribution and exchange. That's Stalinism, which you obviously wouldn't recognise if Stalin bit you in the bum.
The epitome of bullshit is Wellington. Stalinist architecture? Jesus fuck you know nothing about Stalinist architecture, and if this site allowed me to post pictures I would SHOW you that you know nothing. God If Wellington is such an ugly place, why is it described in so many travel magazines, and on so many travel websites as a beautiful little city?
Kelsey? I guarantee all you know about her are her opinions on the TPP. Until you can tell me exactly what her "hard left" economic and social opinions are you should maybe shut the fuck up. AGAIN - Citation needed on this.

Guerilla Surgeon said...

As you may have noticed :-), I'm getting a bit tetchy about this whiny right wing bitching about you know – Helengrad, Stalinism, the Cuba -like status of New Zealand in the 1970s, blah blah, ad whinitum. So every time you do this whoever you are, I'm going to call you on it, and ask for direct parallels between Stalinist Russia and New Zealand. And as usual of course, because it's a really hard question, you won't bother answering it. Grandstanding.
PS, Brendan still waiting to hear about your Islamic theological qualifications. Because if you say anything about Islam in any future threads, I'm going to take the Mickey unmercifully, unless you can provide me with some. Sauce for the goose.
Incidentally Robert, the Cuban medical system was and probably still is very good. And if I remember rightly the life expectancy in Cuba was somewhat better than the US. (Unless you take out all those poor people with no medical cover of course, which some people do want to do.)

Bushbaptist said...

Well said GS and my sentiments are very similar to yours.
The unmitigated guff that is spouted by Rightwingers is astounding! I spent the 1950's as a teenager and I had my first full-time job in 1959 (6hrs/night kitchenhanding in a restaurant).I lived through those "Bad Ole Daze" and the descriptions often put forward here by rightwingers are from some other country not NZ.

When Rob Muldoon was PM the world was going through some serious turmoil. Oil prices went through the roof which had a drag-on effect on our economy. His "Think Big" schemes were to make NZ as near to self-sufficient as possible.

@Robert: man, you spout more crap than a city sewer pipe! The majority of people working for the Railways were very highly skilled, especially the Railways Workshops where apprentices were held in very high regard. They were trained well there as they were in the State Housing (Carpenters, Plumbers and Electricians). The Forestry Dept and the Lands and Survey took most of the low skilled people. But they also trained them in good work ethics.

I would be willing to bet that you have never been anywhere near Cuba. Their Health and Education systems is far superior to anything in the US.

Davo Stevens.

Anonymous said...

Its a case of perspective what is Rugby a game 30 guys wrestling and running with a piece of pig skin a culture not known by the participants as code of behaviour ruling their lives they only see it as a game a source of income a discipline no matter how limited in its in its ability to produce secure social values on an everyday basis
The game is like every other way of life an institution a meter of nationalism to the point where govts make laws to condone the worst aspects of its celebration changing licensing laws not only for the the desires of the public but to create a new precedence in our society's attitude to alcohol which is already a public curse in its acceptance
Gambling another off shoot of social ills coming from the game where families will suffer because of the culture
A national export for the few who are able to maintain the level required to receive the benefits of it but what proportion of the earnings actually transpire into being tangible benefits to the nation as a whole
Its great game no doubt but it is run like a Ponzi scheme as a business

Anonymous said...

Yes Bushbaptist you make a very concise point to the reality of the skill level of not only the railways but the ministry of works as well as all the govt dept up till the exit of one R D Muldoon and its has been to the nations detriment that so many now who dont have the skills of then get to influence this nations political direction and the ability to train our coming generations for the purpose of progressing this country to the point our new digital engineers are being hamstrung by the political direction of our govt