Monday 24 May 2021

Following Labour's Lead.

Red And Proud: The only real question, after Thursday’s Budget, is: How long will it take National to realise how profoundly the political game has been – and is being – transformed by Covid and Climate Change? Socialism is no longer a dirty word.


YOU HAVE TO ADMIT, Judith Collins made a reasonable fist of responding to Grant Robertson’s 2021 Budget. It wasn’t enough, of course. It would have required a truly Churchillian performance to dispel the magic of Robertson’s speech. Labour has well-and-truly learned what National appears to have forgotten: that people feel long before they think. And Robertson had just made a goodly portion of the New Zealand electorate feel righteous. As performances go, his was a bloody hard act to follow.

Still, the leader of the Opposition has not forgotten how to use her sword. Her thrust against “Meccano lessons” at the Hillside Workshops was deadly. Unfortunately, she failed to follow it up with an equally devastating assault upon the whole import substitution policy to which Robertson’s proudly proletarian pitch paid homage. There was, after all, a reason why Labour, in the early 1980s, began casting around for something to replace the Sutchism that had dominated Labour’s policy-making since the late-1950s.

It is one of New Zealand political history’s greatest ironies that Rob Muldoon, the “Young Turk” who won his spurs attacking the massive import substitution programme unleashed by the Second Labour Government, should have ended his career amidst the wreckage of “Think Big” – as he called his own updating of the left-leaning economist, civil servant and historian, Bill Sutch’s, radical economic development policies.

Indeed, it is interesting to speculate on what might have happened if Muldoon had remained true to the instincts of his younger, private-enterprise self, by continuing to reject state-directed development in New Zealand. Had Muldoon embraced the same ideas as Margaret Thatcher and Ronald Reagan in the late-1970s and the early-1980s, it could easily have been Labour which ended up betting the farm on one last roll of Sutch’s dice.

As things turned out, it was Labour’s new leader, David Lange, who found himself proclaiming that New Zealand couldn’t go on being run “like a Polish shipyard”. Egged-on by his Treasury advisers, and the smarter elements of the Fourth Estate, he was persuaded to join his backers (Roger Douglas, Michael Basset, Mike Moore and Richard Prebble) in “thinking the unthinkable” about New Zealand’s economic future.

A strong case can be made that Labour’s willingness to “think the unthinkable” made it possible for National to give up thinking altogether. Initially confounded by Labour’s abrupt change of ideological direction – not to mention the near universal praise heaped upon its new “more market” policies by the mainstream news media – National floundered hopelessly. Its win in 1990, which the news media proclaimed a “landslide”, was, by MMP standards, a remarkably close contest. National may have received 47.82 percent of the popular vote, but the combined popular vote for Labour, New Labour and the Greens was 47.15 percent.

Thanks to the First-Past-the-Post electoral system, the new National prime minister, Jim Bolger, was spared the challenge of governing with a one-seat majority. He may have campaigned in the poetry of “The Decent Society”, but the prose he governed in was all written by the same neoliberal scribes who had authored Labour’s policies – albeit with considerably sharper pens. The National Party’s finance minister’s, Ruth Richardson’s, “Mother of All Budgets”, so loudly condemned by Grant Robertson in Thursday’s Budget Speech, was really only Roger Douglas – with bells on.

By the time Labour (with the Alliance in tow) was back in control of the Treasury Benches, its acceptance of the ground rules of Neoliberalism was, if not complete, then sufficiently substantial for the emergence of a style of governance that could be, as John Key went on to prove, as readily adopted by National as Labour. Conservative purists railed against Key’s “Labour-Lite” approach, but it proved more than equal to the challenge of a global financial crisis and a devastating earthquake. It was certainly enough to secure nine years of National Government, which might easily, in the absence of “Jacindamania”, have stretched into twelve.

Historically, this is par for the course with National. From the Opposition Benches, it railed against the Keynesianism of the First Labour Government, only to embrace it as the price of electoral victory.

Muldoon shot down radical Sutchism in 1961, only to see Holyoake and Marshall adopt a watered-down version of the same well into the 1970s. In 1979, beggared for options in the face of seemingly indefatigable “stagflation”, Muldoon became the last, and easily the most radical, of the Sutchists.

Bolger played the same game with Neoliberalism: railing against its brutalities from Opposition; then allowing Bill Birch to crush the trade unions, and Richardson to poleaxe what was left of the welfare state, from the safety of the Government benches.

In 2008, Key accepted a less-sharp-edged version of Neoliberalism from Helen Clark, and cruised effortlessly to three electoral victories in a row.

And now, thanks to Covid-19, Labour finds itself, once again, strategically placed to set a new course for economic and social policy in New Zealand. With the monetarist policies that have, for the past 40 years, constituted the core of Neoliberalism, discredited (by that inveterate foe of all theories – Reality) Prime Minister Ardern and Finance Minister Robertson find themselves at a turning-point very similar to the one their party encountered in the early-1980s.

Confronted with the immediate challenges of a global pandemic, and, behind them, the even more daunting challenges of climate change, governments all over the world are shrugging-off the dogma that there is no problem so great that it cannot be solved by giving the market its head. State action, on a massive scale, is once again being seen, by politicians with an eye to the future, as the indispensable agency of economic and social survival.

Ardern and Robertson have grasped this ideological shift a great deal faster than any of their rivals. Certainly, it has encouraged them to deploy the sort of rhetoric that would have made their predecessors cringe. Targeting Richardson’s Mother of All Budgets and raising benefits in a long-delayed one-fingered salute to this hated left-wing symbol of neoliberal cruelty, was only the beginning. As the Budget Debate wore on, Labour’s backbenchers could not forbear from getting in on the act. The new MP for Wairarapa, Kieran McAnulty, delivered the lines most likely to raise the National Party’s collective blood-pressure:

“Yes, I am a socialist and I’m proud of it. Yeah, there you go. Thank you very much. Bring it on. And I’m very proud to say to the good people of the Wairarapa that they elected a proud socialist as their MP.”

The only real questions, after Thursday’s Budget, is how long will it take National to realise how profoundly the political game has been – and is being – transformed by Covid and Climate Change? Will it be two, three, or four terms? And, how many leaders will the party have to elect, and discard, before it finally masters the new language of electoral victory?


This essay was originally posted on the Interest.co.nz website of Monday, 24 May 2021.

24 comments:

Wayne Mapp said...

Now that he has declared himself, will the voters in Wiararapa continue to elect him. The seat is traditionally National, with exceptions from time to time, most notably Georgina Beyer.

Has the zeitgeist really changed? Is economic orthodoxy really dead?

I note Andrew Bayly (on Q & A) was reasonably relaxed about the benefit increases. He said National would not wind them back, though I imagine National will put in more accountability tests, particularly about employment training.

The benefit increases add about 1% to government spending, which will be a permanent increase. Labour is getting toward to top end that is the norm for government spending in NZ, that is 35% of GDP. It is a lift from 30% that prevailed through to the beginning of covid.

I don't see much indication that Labour will go above 35%. That would require tax increases.

In short I have yet to see a new economic revolution.

Kat said...

Act now proclaims it wants to double its MP's in parliament next election. That has to be a warning shot across the bows of the Nat life raft. Its Bob Dylan's birthday today, oh how the times they are a changing.

Nick J said...

So if I read your argument correctly Chris National will follow whatever Labour initiate "with bells on". Excellent.

Trev1 said...

"The magic of Robertson's speech"?!!! Not the Glenvale Dry Red again!? Time to turn the cellar over perhaps?

David George said...

Is this it, the labour party's glorious vision of the future?
This clueless wannabe wants us to think he's being daring and courageous dragging out a hundred year old ideology that's been a failure every time it's been tried.
How about no!

Tom Hunter said...

The future is Socialism, eh? Chuckle. Have heard that one many times before.

With the monetarist policies that have, for the past 40 years, constituted the core of Neoliberalism, discredited (by that inveterate foe of all theories – Reality)

Oh really? Reality is currently rearing it's head in terms of inflation in the USA, thanks to the stunning concept of flushing trillions of dollars into a system with insufficient goods and services, and that's before we consider the inflationary effect on the US stockmarket over the last few years from similar, if smaller bursts of created credit. We may be seeing something similar happening here, first with house prices and now at the supermarket, the latter having been a bit of a shock lately.

State action, on a massive scale, is once again being seen, by politicians with an eye to the future, as the indispensable agency of economic and social survival.
What state action have we seen beyond spending and borrowing on a massive scale, primarily to keep things afloat? The incredible thing is that so much money could already have been spent for so little practical results, whether in housing, healthcare, poverty stats and so forth.

Before you start crowing about this you might want to consider why Sutchism failed, but of course you don't consider that it did and that NZ circa 1984 was tickety boo with no fundamental problems. That's not how I recall it entering the workforce as a young man and neither did my friends. I guess we have to learn the lesson all over again - and that's assuming Labour-Green are actually foolish enough to go full Sutch in the name of Climate Change.

Perhaps an electrified Trekker is on the cards?

Jens Meder said...

Is Kieran McAnulty just a socially concerned MP, or a true orthodox Socialist of the "social ownership of the means of production" (i.e. state monopoly capitalism) kind ?

If of the latter kind, too many of them in Labour's ranks might lose the elections for Labour.

swordfish said...

A Woke distortion of Socialism (more precisely, of Social Democracy) ... a political elite (buttressed by an affluent, authoritarian Woke New Middle Class activist base) cherry-picking segments of the low income & poor for redistribution while systematically scapegoating 'out-groups' (in Intersectional terms) among the same strata. The latter currently being quietly but rapidly transformed into 2nd class citizens.

Or, to put it another way, those Pakeha who have disproportionately inherited the wealth from Colonisation forcing those Pakeha (& other non-Maori) who haven't to do all the Penance, all the sacrificing, all the suffering ... as they go about establishing this Brave New Woke World, bereft of universal human rights, equal citizenship & other core principles of liberal democracy.

Facilitated by the Romanticisation / Sacralisation (in fact bordering on Fetishisation) of demographics favoured by the ID Politics Cadre & the demonisation of others.

Guerilla Surgeon said...

Blogger David George said...
"Is this it, the labour party's glorious vision of the future?
This clueless wannabe wants us to think he's being daring and courageous dragging out a hundred year old ideology that's been a failure every time it's been tried.
How about no!"

As opposed to unregulated capitalism. A 200 year old ideology which has regularly failed. 1880s, 1920, 1923,1929, 1937, 1945, 1949.

As usual, defining socialism the way you want to, means you can pretty much say anything you want about it. I choose to define socialism in terms of social democracy and the Scandinavian model. That's got unregulated capitalism beaten into a cocked hat. There is a story about an American journalist interviewing a German CEO some years ago and asking him what his highest tax rate was – turns out to be 60%. Journalist asked him why they don't rebel against this. His reply was something like "I don't wish to be a rich person in a poor country." So I'll take some form of Keynesian economics any day.

Tom Hunter said...

One more thing about this new "revolution" that's suddenly going to start building stuff (and because I know dear old one-eyed-Labour-Adern worshipers love the idea of a new 21st MOW), is the reality (there's that word again) of government in this time, courtesy of Lefty commentator Danyl Mclauchlan in his Spinoff article, If you need to create a new ‘Implementation Unit’, what is everyone doing now?:

Sometime last year I asked a political operative close to the government what they thought of the MoW idea. They replied, “It’s the same mistake National made with MBIE. Let’s build a new entity to do the economic transformation the rest of the government can’t deliver. And how’d that work out? Imagine you’re a Labour minister and you decide to fund a Ministry of Works to deliver all these projects that NZTA and HUD and Kāinga Ora seem unable to do. You’re going to spend two years and, I dunno, a couple hundred million setting it up. You’re going to end up staffing it with people from NZTA and Kāinga Ora, because who else are you going to get? But once it’s built you’ve just replicated these same dysfunctional organisations. So it’s not going to build anything and your political career will be over.”

The problem with the bootstrap argument, especially when applied to government, is how often people fall over their own bootstraps because they come undone.

Jens Meder said...

Well, swordfish and others - why not examine, discuss and debate the pros and cons of the easily understood and measurable socio-economic concept and goal of a 100% Property Owning Democracy ?

On the economic level everything is clearly known about how to achieve it - so why is there such mystifying reluctance to seriously examine its pros and cons ?

Is it because too many of us would not like to participate in the effort to achieve it?

But why - so far - is not even our property owning majority very enthusiastic in publicizing and promoting the attitudes and actions that made them prosperous ?

Even tax reductions converted into personal longer term capital ownership can help towards achieving wealth ownership by all.

Unknown said...

@ Wayne Mapp

" In short I have yet to see a new economic revolution."

I have to say I'm inclined to agree though I have not studied the text. But a lot seems to be being made of an increase in benefits that will barely keep up with inflation. The "transformation" doesn't seem to quite live up to the rhetoric.
D J S

The Barron said...

With the exception of the first term of the Helen Clark government (Labour-Alliance), MMP coalition agreements have been National or Labour trying to set themselves up in the European model of MMP. A major party, centre-right or centre-left allying with populist parties or politicians (NZ First, United, the Maori Party). In this they could dominate the centre of politics, while simply accommodating parties that could otherwise pull them ideologically (ACT and Greens).

Jacinda has realigned this in her second term. Her party became both the populist party and the dominant party. While some pundits argue a need to placate the votes drawn in through the populist capture, it would seem an equally sensible strategy to move the centre while in charge of the populist. The 2020 election can be seen as the disappearance of the populist parties and the integration of this facet that has swirled in NZ politics since the '90s [NB: The Maori Party still behaves as a populist party, but campaigned on more set grounds on the political spectrum].

It leaves a brave new world. National can try to move to the left shifting centre and leave ACT attacking the right flank, or, protect the right flank and drift further from the realigned centre. Either option do not give it Government any time soon.

Labour have now the chance to govern under MMP as a party of principle, with the Parliamentary members unencumbered by the constraints of previous populist breaks.

You may say I'm a dreamer
But I'm not the only one ...

David George said...

GS. "I choose to define socialism"
You don't get to choose your own definitions. Sorry.

Guerilla Surgeon said...

"Labour have now the chance to govern under MMP as a party of principle, with the Parliamentary members unencumbered by the constraints of previous populist breaks"

Glad you're not holding your breath on this one.

Kat said...


"and because I know dear old one-eyed-Labour-Adern worshipers love the idea of a new 21st MOW......"

So now Danyl Mclauchlan a Spinoff opinion writer is held up as an authority on govt administration and delivery and be quoted as benchmark "reality" on policy machinations within Labour.

It has become obvious that the use of flawed reasoning by some commenters is most prevalent.

sumsuch said...

Trez amuzent, all this shit. No one objects to a 'war govt' and that is socialism much beyond every social democracy. Call it a war govt, which is the situation, and lets go forward.

Guerilla Surgeon said...

"You don't get to choose your own definitions. "
And yet you do it all the time.

CXH said...

A war government? How the ideas of hardship have changed over the years.

If it was a war government I wouldn't like our chances considering our boarders where rather leaky and we have no suitable software to track vaccines more the 30 mill and 12 months later.

Tom Hunter said...

Call it a war govt, which is the situation, and lets go forward.

Yeah, yeah. Every "Progressive" government since that racist idiot Woodrow Wilson(D) has pushed this idea that everything is a war requiring massive centralisation of government and all their planning. That of course was carried on by his Secretary of the Navy, Franklin Roosevelt, who thought it was just what was needed in the Slump, followed twenty years later by his worshipful protege, LBJ and The Great Society.

Everything requires a war:
The War on Poverty
The War on Drugs
The War on Terror
etc, etc, etc.

None of them have done very well. Maybe the substitute of landing a man on the moon will make it work?

So now Danyl Mclauchlan a Spinoff opinion writer...
Oh, don't worry Kat. He's very supportive of the Labour government although a Green supporter, and it wasn't his opinion but that of a high-up advisor to the current government whom he knows.

Maybe they should listen to you instead?

Kat said...


"Maybe they should listen to you instead?...................
I believe they do, Tom.....

Would it be the same high-up advisor that advised against reinvesting in Kiwirail and the Hillside Workshops. Could it be this advisor is so high-up the rarefied air has addled the grey matter.

greywarbler said...

Well TH if they listened to Kat they might be getting nearer the best way to go unlike following your negative path filled with potholes and hidden pits.

sumsuch said...

So many nitwits, so few truth-seekers.

sumsuch said...

Not really, Chris. They, at their base, are not really willing to spend -- which is the sign. Our teeth will have to remain mangey for another year. 'Keep to the Budget' is not social democracy in essence.