Encountering Resistance

Offering Resistance: At the tender age of 26, I learned the hard way that mass support should never be assumed, or demanded. It has to be earned. "Resistance" was modelled on the Polish "Solidarity" (can't ya tell!). In theory a "movement of movements" seemed like a fine idea. Putting it into practice turned out to be a little more difficult.

HAVE YOU EVER HEARD of Resistance? No, not The Resistance, which fought the Germans in occupied France during World War II, but Resistance – as in the single word – like Solidarity? Don’t worry. Unless you lived in Dunedin in 1982, and have a very good memory, there’s no reason why “Resistance” should mean anything to you at all.

The only reason I remember it, is because I set it up.

Radicalised by the Springbok Tour protests of the year before; despairing of formal electoral politics following the narrow return of Rob Muldoon’s National Government; and inspired by the exploits of Poland’s free trade union, Solidarnosc (Solidarity), I was hoping to set up, right here in New Zealand, a similar extra-parliamentary people’s movement, broad enough to encompass all of the big issues of the day.

The movement was to be launched at what I called, with youthful grandiloquence, “The Dunedin People’s Congress”. Invitations went out to interest groups of all kinds: unions, students associations, environmental organisations.

It was a flop. Only a handful of people turned up. And, at the tender age of 26, I learned a bitter – but immensely valuable – lesson about political agitation. Mass support cannot be assumed, or demanded. It must be earned.

The then President of the Labour Party, Jim Anderton, summed it up for me a few months later, when he advised the radical core of Labour Youth’s Dunedin branch to: “Always build your footpaths where the people walk.”

Today, nearly thirty years on, the “Occupy Wall Street” (OWS) movement, and its multitude of emulators in the USA and around the world, are inspiring a new generation of activists – just as Solidarity inspired activists in the early-Eighties. In Auckland and Dunedin, small encampments have been erected in the city-centre by “occupiers” eager to assert the OWS slogan “We are the 99 Percent!” Occupy Auckland has even borrowed OWS’s ultra-democratic, consensus-based, decision-making process: setting up its own “General Assembly” to govern the occupation.

I simply couldn’t avoid a wry grin of recognition when I saw the big “General Assembly” banner unfurled in Aotea Square. “Dunedin People’s Congress” anyone?

The central question that Occupy Auckland and Occupy Dunedin now have to answer, after six days of occupation, is whether or not “the people” are walking on the “footpaths” these groups have, with such enthusiasm (and not a little self-importance) constructed? Or, like the doomed “Dunedin People’s Congress”, is their General Assembly only attracting the most idealistic and/or naïve of the Radical Left?

Earlier this week, a friend of mine e-mailed me the link to a YouTube clip of the 15 October demonstration in Madrid. The Spanish capital’s most central public square – La Puerta del Sol – and the broad avenues leading into it were filled with demonstrators. There must have been at least 100,000 of them; an angry swarm of “indignant” Spanish citizens. The sort of crowd that, here in New Zealand, only great sporting events like the Rugby World Cup can assemble.

When Occupy Auckland and Occupy Dunedin are able gather support on a similar, massive, scale, their claim to speak for “the 99 percent” of the population which cannot boast great wealth, nor wield great power, will acquire a measure of credibility.

But that day is, I fear, far away.

New Zealand is not Spain. We do not face an unemployment rate of 20 percent. Our government has not unleashed the sort of savage austerity measures that have so incensed the Spanish people. At time of writing, Police have yet to pepper-spray, tear-gas or baton-charge any of the non-violent occupiers camped-out in Aotea Square or the Octagon. And, if for some reason (the MV Rena sinks, for example) people do become indignant enough to fill those public spaces, the radical Left will soon discover just how conservative most ordinary people really are. Broad agreement is possible on economic issues – but on precious little else.

I speak from experience. Because, you see, I did end up at a Dunedin “people’s congress” – of sorts. It was called the Otago Trades Council, and its 100-plus delegates represented more than 25,000 unionised workers throughout the province. You dared not take these ordinary New Zealanders for granted. Their trust was a precious commodity – and you had to work hard for it. But when you’d earned it: when it was given; resistance was guaranteed.

This essay was originally published in The Timaru Herald, The Taranaki Daily News, The Otago Daily Times, The Greymouth Star and The Waikato Times of Friday, 21 October 2011.

Drill, Baby, Drill!

Foreseeable Crisis: The mile-deep disaster that overtook the Deepwater Horizon oil-rig in the Gulf of Mexico had massive technological assistance within a day's sailing of the catastrophe. Even so, it took BP several months to bring the massive ecological crisis under control. Given the authorities' obvious logistical difficulties in dealing with the comparatively small oil-spill from the Rena, is deep-sea oil exploration really the best answer to New Zealand's energy deficit?

“DRILL, BABY, DRILL!” It’s the battle-cry of the believers in “business as usual”. Sarah Palin’s infamous injunction is also the Populist Right’s translation of former American Vice-President, Dick Cheney’s, much more ominous observation that: “The American way of life is non-negotiable.”

What did the Vice-President mean? In brutally simple terms, Mr Cheney’s words meant that nothing should be allowed to come between Americans and the supply of cheap fossil fuel that underpins the USA’s extraordinary wealth.

“Drill, baby, drill!”, also sums up the National-led Government’s policy on fossil fuels. The Rena may be leaking heavy fuel-oil into the Bay of Plenty, but the Government’s plans for promoting deep-sea oil exploration within New Zealand’s exclusive economic zone (EEZ) have yet to be put on hold. Indeed, the Greens and Labour have been chastised for even suggesting such a moratorium, and thereby giving the relevant authorities time to absorb the causes, consequences and lessons of Rena’s grounding.

Why the gung-ho attitude? Why is the Government so determined to proceed in the face of so much evidence suggesting the need for extreme caution? The enormous difficulties already encountered in off-loading just 1,700 tonnes of fuel-oil from a coastal container ship pale into insignificance when compared to the ecological tragedy which unfolded in the Gulf of Mexico between April and July of 2010.

That disaster took place within a day’s sailing of the USA and Mexico, two of the world’s largest energy producers and refiners. So, help was close at hand. A similar deep-sea drilling accident occurring off the coast of New Zealand: a country at the end of the world’s sea-lanes; thousands of miles, and weeks of sailing, away from international assistance; would swiftly dwarf the Deepwater Horizon catastrophe.

Simple common-sense suggests that even the most rudimentary of cost-benefit analyses would flag deep-sea exploration in New Zealand’s EEZ as, at best, marginal, and, at worst, grossly irresponsible.

Of course, the same could’ve been said (and was) about the radical deregulation of our coastal shipping industry. Allowing so-called “flag of convenience” vessels (crewed not by the best, but by the cheapest officers available) to supplant New Zealand flagged and crewed vessels, made a Rena-style accident all-but-inevitable. The Maritime Union of New Zealand warned successive governments over and over again about the risks. Nobody listened.

So, what is it? How is this refusal to recognise simple common sense, and heed the warnings of experts, to be explained?

The answer is frighteningly simple. Politicians like Sarah Palin, Dick Cheney, Gerry Brownlee and Hekia Parata (Mr Brownlee’s stand-in as Energy Minister) are all in a state of denial.

Even though a succession of reputable international agencies (the latest being the IMF) have warned the world’s governments that the moment of peak oil production occurred five years ago, and that the chances of the current and future global demand for oil being met by the discovery and exploitation of new deep-sea fields are extremely low (the world needs to locate the equivalent of four Saudi Arabia’s to meet the looming shortfall of cheap oil supplies) the politicians just go on denying that any of this alarming information is true.

Given New Zealand’s acute vulnerability to price and supply shocks, our political leaders’ refusal to face the facts is, perhaps, understandable. The best evidence available suggests that this country’s domestic fossil fuel reserves will be largely exhausted by 2020. That will leave our automobile-dependent society and economy dangerously exposed to the vagaries of international supply and demand.

Try these numbers for size.

The current price of “Brent Crude” is between $US100-$US120 per barrel. The NZ Treasury forecasts that in 2015 our exchange rate with the US dollar will be 0.60$US/$NZ. Assuming that by 2015 the declining global supply of oil has pushed the price of Brent Crude to $US200 per barrel, means New Zealand would need to find an additional $10.5 billion, annually, to pay its net fuel import bill. (Compare this with the total cost to Government of rebuilding Christchurch, estimated by Treasury to be $8 billion.)

The economic consequences of such a massive increase in the price of oil are easily imagined: falling GDP, rising inflation, declining real income, decreased consumer spending, increased unemployment, recession.

And so the cry of “drill, baby, drill!” goes up. Because it’s easier to imagine some lucky offshore prospector uncovering another North Sea oil and gas field than it is to imagine how any government might even broach, let alone manage, the winding-back of our fossil-fuel-based civilisation.

It’s all too hard. Just as it was too hard to resist the deregulation of our coastal shipping industry – and so keep our beaches and wildlife free from stinking, toxic sludge.

Fifty years from now, when the foreign ships no longer call, may our grand-children laugh where we now weep – and wonder at our folly.

This essay was originally published in The Press of Tuesday, 18 October 2011.

They're Only 0.1 Percent - But It's A Good Start!

A Good Beginning: One-thousand-plus "Occupy Auckland" protesters gathered in Aotea Square on 15 October and constituted themselves as a "General Assembly" of Aucklanders. But, if it really wishes to speak for 99 percent of its fellow Aucklanders, the General Assembly must turn a good beginning into something much, much bigger.

IT’S NOT OFTEN that old age and treachery are bested by youth and idealism, but it happened on Saturday. The “Occupy Auckland” organisers gave themselves just one week to add New Zealand’s largest city to the growing list of “occupied” cities around the world. Too little time, I said. People aren’t angry enough, I said. Can’t be done, I said.

Well, I was wrong.

I had expected less than 300 people to show up. But it was clear from the moment I arrived at QEII square on Saturday afternoon that there were many more people than that. Between them, Facebook and the wreck of the Rena had assembled a reasonably respectable protest march. As an estimate, two thousand would have been too generous, and one thousand too stingy. But if you’d said around 1,400 protesters set off up Queen Street for Aotea Square, you wouldn’t have been far off the mark.

I like that number because it represents exactly 0.1 percent of Auckland’s 1.4 million citizens. In other words, the “Occupy Auckland” protesters numbered just one tenth of the 1 percent of fat-cat capitalist greedsters they were marching against. I’m not making this point to be snarky, merely offering it as a hopefully useful corrective to some of the over-ambitious claims being made by the protest leaders.

Because the people who have set up camp in Aotea Square are very obviously NOT representative of 99 percent of Aucklanders. They are far too young, far too white, and far too unencumbered by the burdens of job, mortgage and family to be anything like the twenty-thousand-plus ordinary Aucklanders who celebrated the All-Blacks victory over the Wallabies throughout the central city the following night.

But they do represent something. There was a pile of youthful energy and a playful sense of creativity permeating the Aotea Square “campsite” on Saturday afternoon. Even I, a staunch opponent of “consensus-based decision-making” for more than 30 years, felt my frown lines disappearing and a smile slowly spreading across my face as the “facilitators” (don’t, whatever you do, call them “leaders”) explained to the thousand-strong “General Assembly” the four basic hand-signals indicating Agreement, Disagreement, Point of Process and Block.

Here on the green lawns of Aotea Square, under a bright spring sky, I was witnessing something new under the sun – and I hadn’t witnessed anything new in left-wing political practice for a very long time. Suddenly, I was laughing at the speakers’ lame jokes. And, when the various “working-groups” who’d made the day’s events possible were introduced to the General Assembly, I found myself joining-in the crowd's very big round of applause.

I was, however, very glad the plan to literally “Occupy Queen Street” had been abandoned. Worried that there might still be some who refused to accept the decision to shift the focus of the protest to Aotea Square, I moved ahead of the march and took up a position overlooking the big Wellesley Street intersection. If there was going to be a street-based occupation, this is where it would happen.

The Police agreed. From a side street, 24 constables, led by a burly Police Sergeant, formed up into what was clearly a snatch-squad. They were decked out in stab-vests, hand-cuffs and appeared to be carrying batons. Further up Wellesley Street, three large “Paddy Wagons” stood ready to receive the constables’ “catch”.

I watched the protest march approach the intersection, saw it pause, gather mass, pause again, and then move on up Queen Street. The back-end of the march did the same: pause, gather mass, pause. A haka was performed – and then the last of the marchers followed their comrades up Queen Street to the Square. The Police snatch-squad about-turned and marched away.

Aotea Square was always the obvious occupation site. In the popular imagination, if not in strictly legal terms, it is Auckland’s most important public space – a city square – just like the city squares of Cairo and Athens, Barcelona and Madrid. Wall Street is a potent political symbol: Queen Street, for most people, is just a carriageway.

But now the rules of the General Assembly are agreed, and the tents pitched – what happens next? The weather is predicted to turn bad for most of the next week, and heavy rain will quickly turn Aotea Square’s green lawns into muddy wallows. A General Assembly of one thousand merry protesters is an impressive sight. An assembly reduced to 100 bedraggled campers will not look so good.

The question of how to build the protest: of how to reach out to the 99.9 percent of Aucklanders who are yet to involve themselves in this bold political experiment; must be answered. Only when “Occupy Auckland” can gather together in one place as many enthusiastic citizens as the organisers of the Rugby World Cup, will their calls for change acquire genuine political heft. (And when the General Assembly numbers 20,000 - instead of 1,000 - I suspect its calls for change will turn out to be a lot less radical than Saturday's revolutionary speeches.)

The organisers of “Occupy Auckland” have made a good beginning – better than I thought possible. But, in the words of All-Black coach, Graham Henry: “The job hasn't been done yet.”

This posting is exclusive to the Bowalley Road blogsite.

Lies, Damn Lies, and "Inferences"

"Dunno. Wasn't There.": The Prime Minister's ordeal by press conference over his allegation that Standard & Poors had warned economists that a credit downgrade was more likely under Labour has hopefully cured him of relying too heavily on the "inferences" of businessmen-spies.

THE PRIME MINISTER can count himself very lucky that the House of Representatives stands adjourned and the Speaker is abroad. Were they not, it is difficult to see how John Key could have escaped the scrutiny of the Privileges Committee. Had the timing been just a little different, he could easily have found himself in the same position as Winston Peters in 2008: diverted from the election campaign to answer charges of misleading Parliament.

But, then, Mr Key has always been lucky – as lucky as his principal opponent, Phil Goff, has been unlucky. Even so, the adjournment (and imminent proroguing) of the House, and Dr Lockwood Smith’s absence have not protected him from several days of acute political embarrassment.

His claim to the House that a change of government would increase the likelihood of a credit downgrading by Standard & Poor’s has been exposed as, at best, a false conclusion – drawn from an unjustified inference.

We know this because a spokesperson from Standard & Poor’s has taken the highly unusual step of publicly contradicting a prime-minister.

Melbourne-based Kyran Curry, who was present at the S&P-sponsored meeting of economists where the discussion of New Zealand’s credit-rating took place, stated unequivocally: “I would never have touched on individual parties. It is something we just don’t do. We don’t rate political parties; we rate Governments.”

In the face of such a public slap-down, Mr Key had no choice but to concede that his understanding of Standard & Poor’s position was based entirely on information received from an anonymous source who had been present at the meeting. Fierce questioning from a highly sceptical Press Gallery then forced the Prime Minister to release his “evidence” – an e-mail in which his (still anonymous) informant declared:

“There was a key one-liner that I thought you could well use. S&P said that there was a 1/3 chance that NZ would get downgraded and a 2/3 chance it would not, and the inference was clear that it would be the other way round if Labour were in power.”

That word “inference” should have caused Mr Key’s political radar warning system to light up like a tilted pin-ball machine. Prime Ministers do not rely on inferences – no matter how “clear”. They rely on facts.

Nor should they allow their parliamentary opponents to assume that they were present at a meeting which, in reality, they did not attend. Unless, of course, they enjoy repeating, over and over again, to a roomful of stony-faced journalists: “I wasn’t there.” “I wasn’t at the meeting.”

And, never – under any circumstances – should they twitch back the curtain of Prime Ministerial omniscience to reveal the tacky truth that he or she is the receptacle for an endless stream of petty gossip and partisan innuendo.

How long does Mr Key think it will take a clever journalist to track down the full list of economists present at the Standard & Poor’s meeting? When, by his own admission, one of the names on that list is a prime-ministerial spy, how long does he think it will take before a shrewd process of elimination identifies the guilty party?

The bank economists representing the ANZ and the BNZ have already been forced to deny any part in the leaking of their colleagues’ private deliberations to the Prime Minister. Others are bound to follow. And none of them will be happy.

Contemporary economics reminds me of nothing so much as the huckster’s shill. And, like any confidence trick, it only works while people keep believing what they’re told. Just as in Frank Baum’s Wizard of Oz, where the smooth running of the Emerald City depends on no one discovering what lies hidden behind the curtain, faith in the Government’s economic management depends upon people believing their leader is guided by more than anonymous spies peddling “one liners” and “inferences”.

Mr Key’s remarkable luck may have preserved him from the Privileges Committee, but in the Court of Public Opinion he stands convicted.

This essay was originally published in The Dominion Post, The Timaru Herald, The Taranaki Daily News, The Otago Daily Times, The Greymouth Star and The Waikato Times of Friday, 14 October 2011.

Moving The Frame

Propaganda Coup: This excellent example of political re-framing should be giving the National Party serious heart palpitations. The Rena Disaster is a classic example of the exogenous political event - the thing no campaign manager can plan for. In 2002 in was "Corngate" - this year it could well be the Rena. Some are already calling New Zealand's worst environmental disaster "Key's Katrina". If the Prime Minister isn't able to escape this frame - and quickly - he could end up drowning in it.

Defusing The Bomber

Defused: Martyn "Bomber" Bradbury's exclusion from Radio New Zealand's Afternoons with Jim Mora's "The Panel" was unfair to the man and embarrassing for public radio, but it was also, in the intimate little country New Zealand has always been, utterly predictable.

I WAS A LITTLE SURPRISED, and a lot impressed, when the production team behind Radio New Zealand – National’s Afternoons with Jim Mora invited Martyn “Bomber” Bradbury on to “The Panel”. Surprised: because Bomber’s style is about as far away from the decorous National Radio tradition as it’s possible to get. Impressed: because it confirmed Afternoons’ determination to remain at the cutting-edge of public service radio in New Zealand.

Since the demise of Radio New Zealand’s commercial arm in the 1990s, and the Fifth Labour Government’s craven refusal to honour its promise to establish a publicly-owned, commercial-free, nationwide youth network, Radio New Zealand – National  has drifted, like a piece of pre-Rogernomics cultural flotsam, in hostile neo-liberal seas.

For nearly two decades the public network has struggled to re-invent itself – with limited success. How could it be otherwise, when the funding increases required for genuine experimentation were consistently withheld by Radio New Zealand’s political masters.

To be utterly dependent on non-hypothecated state funding cannot help but foster an institutional culture of acute self-awareness. Radio New Zealand’s broadcasters have become experts at sensing where the invisible political trip-wires had been laid – and how to avoid them.

“The Panel” – a sort of radio adaptation of TV3’s much-loved The Ralston Group – brought its staff and their guests about as close to those trip-wires as Radio New Zealand’s bosses were prepared to go. And, like The Ralston Group, “The Panel’s” survival depended on its guests fully understanding and respecting the show’s parameters.

I well remember TV3’s Head of News & Current Affairs, Rod Pedersen, telling Ralston’s guests (most of whom were experienced journalists) that he trusted them, as professionals, to know the difference between fair comment and defamation, and thus to keep the network out of the courts. To my knowledge, no one ever let him down.

The producers of Afternoons weren’t as explicit as Rod Pedersen, and yet it was always pretty clear to me that the “culture” of Radio New Zealand was very different indeed from the culture of Newstalk-ZB, Radio Live, and commercial radio in general. Though it ended up as a sort of Ralston-Group-without-pictures, it was originally conceived as a radio version of the BBC’s delightful show Grumpy Old Men – a witty and wistful programme by and for ageing “Baby-Boomers”. You could be many things on Afternoons – but strident wasn’t one of them.

I well remember the day I was ambushed on-air by a bitter and even more than normally vituperative Mike Moore. The former Labour leader really laid into me, landing verbal blow after verbal blow until, becoming very angry, I began to fight back – stridently. Immediately, I felt the vice-like grip of my fellow panellist, Richard Griffin, on my wrist. He shook his head emphatically, as if to say: “don’t go there, stay calm”. Meanwhile, the programme’s amiable host, Jim Mora, very adroitly and professionally, began defusing the confrontation.

This was the institutional culture that Bomber – a natural broadcasting talent honed at stations like BfM and Channel Z – was striding into: pre-written “Soapbox” diatribe gripped tightly in his hand, and that enormous, Gen-X, anti-Baby-Boomer chip he carries around balanced precariously on his shoulder. Talk about inviting Hamas to a bar-mitzvah! This was one gutsy call.

Bomber’s bombastic bloviations swept through Radio New Zealand’s studios – and into the middle-class parlours of the nation – like a noisome radical fart. And, presumably, that was the point. Why else bring Bomber onto “The Panel” unless you genuinely intended to get up the Afternoons audience’s nose? Unless, in the words of Theodore Roszak, you wanted your listeners to experience “an invasion of centaurs”? (Or, in this case, centaur?)

But what about the tripwires? Well, that’s why I was so surprised, impressed, and – yes – even delighted. Because Bomber, host of the high-rating (for Stratos) Citizen A show, and no-holds-barred poster on the Tumeke blog, was gloriously oblivious to any and all of the political tripwires lacing through Radio New Zealand’s corridors. And that could only mean, by inviting him on to Afternoons, one of the network’s highest-rating shows (and one of the highest-rating in the whole country) Radio New Zealand was ready to push out the boundaries of public radio – hard.

Too hard, it would seem.

Perhaps the Radio New Zealand producers were just so used to stepping carefully over all those political tripwires they simply assumed every other broadcaster was too. But there are all kinds of tripwires in broadcasting. In commercial radio they’re laid by the advertisers – via the Sales & Marketing Department – and the shock-jocks ignore them at their peril. In student radio, I imagine the ultimate sin is a terminal lack of “cool”.

As Bomber’s commentaries nudged the stridency levels higher and higher, and Afternoon’s Baby-Boomer audience grew weary of the Bradbury blame-game, the programme was dragged further and further away from its comfort-zone. Sooner or later, Radio New Zealand was bound to say: “Nup. That’s it. We’ve gone too far out on this particular limb.”

The moment came last Thursday afternoon. Bomber took aim at the Prime Minister and squeezed-off a sustained burst of heavy-calibre fire. It was no better or worse than a dozen other well-aimed political fusillades he’d unleashed over the past few months. But, it was one too many.

What happened? I don’t know – and I haven’t been able to find out. Did RNZ Board Chairman, Richard Griffin, put the vice-like metaphorical squeeze on CEO Peter Cavanagh’s wrist? I doubt it. The most likely explanation is that, quite suddenly, and without the clear warning he was entitled to and should have been given, Bomber crossed the invisible line from “gutsy call” to “major liability” – and the Bomber-disposal squad went into action.

Unfair to Bomber? Yes. Bad for the programme? Possibly. Deeply embarrassing for Radio New Zealand? Definitely. But in a society so small; so politically and professionally intimate; and so utterly dependent on invisible lines and unspoken rules as New Zealand, it was also very, very predictable.

This posting is exclusive to the Bowalley Road blogsite.

After The Ball Is Over

And Then What?: Only the criminally ill-informed and/or the hopelessly romantic believe that anyone but John Key will be prime-minister after the General Election. The more important question is: What happens then? After the ball is over - and the global recession finally hits New Zealand?

WITH MORE AND MORE voters regarding a National Party election victory as inevitable, the question arises: “What happens after the ball is over?”

When all the hoardings have been taken down, and all the ballot papers counted – what then? What challenges lie in wait for New Zealand’s government a few miles down the track?

While a fitful sun still bathes large parts of New Zealand in a golden light, many communities already lie in the shadow of storm-clouds blown-in from northern climes.

Farmers and their support networks in rural and provincial New Zealand may find it hard to comprehend the difficulties being experienced by metropolitan New Zealand. This is because record export prices have cushioned them from all but the first few recessionary blows.

Even so, the nation’s cockies – being a cautious and responsible breed – are furiously paying down their debt and eliminating all unnecessary expenditure. It seems axiomatic to them that their government should be doing the same. If the National Party was to run the country the same way they run their farms, say the farmers, all would be well.

But, I wonder if they’d still say that if, as many economists now predict, the Chinese economy experiences a sudden contraction? If China’s apparently insatiable appetite for New Zealand milk powder disappeared overnight – along with her equally insatiable appetite for unprocessed Pinus Radiata and Australian minerals – would our farmers still model their economic expectations on a simple set of household accounts?

For the sake of argument, let’s assume they would. What would be the result?

That’s easy. The farming sector’s huge debts to Australia’s banks would very soon precipitate a major financial crisis. If Chinese demand dried up – on both sides of the Tasman – the Australasian banking sector would be in serious trouble. Farmers unable to pay their mortgages would be foreclosed. Rural properties would flood the real-estate market and land prices would collapse. Farming families’ equity in their properties would evaporate, and the ownership of New Zealand farmland would pass into fewer and fewer hands – many of them foreign.

Very rapidly, the farmers’ pain would be transmitted to everyone else in rural and provincial New Zealand. With the demand for agricultural goods and services in free-fall, small to medium businesses throughout the “heartland” would falter and/or fail. Thousands would find themselves without an income. (Being self-employed, these folk would quickly discover the meaning of bureaucratic delay: how much longer it takes to access the unemployment benefit when you’re not a laid-off employee from a major city.)

To make things worse, the Government (still assuming the country is being run according to the household accounts model) would be searching around frantically for ways to reduce ballooning public expenditure.

A collapse in export prices couldn’t help but have a massive impact on the entire economy – sending the indices of unemployment, spousal abandonment, mental illness and sickness through the roof. Welfare spending would soon constitute an insupportable burden on the State. Benefits would have to be cut and eligibility tightened. Working For Families tax credits would be abolished. The age of eligibility for New Zealand Superannuation would be lifted from 65 to 67 and then to 70. The quantum of the pension would fall from two-thirds to half the average wage.

New Zealand’s misery index would rise sharply.

Of course the cutting wouldn’t stop at the Welfare Budget. Spending on health and education would also fall. The interest-free student loan concession would be removed. Major capital projects, such as hospital, school, state-highway and light-rail construction, would be put on hold. Eventually, the wages and salaries of public servants would face the chop – possibly by as much as 10-20 percent.

This is what “austerity” looks like.

What if the Government adopted a different economic model? A model based on something other than a simple set of household accounts? A model which called for the maintenance of a strong and consistent demand for goods and services? A model which held that price deflation, reduced incomes, and the corresponding reduction in the demand for goods and services thus created, only make the economic situation worse – not better. In short, the model put forward by the British economist, John Maynard Keynes, back in the 1930s?

Well, that model would require the Government to do a great many things.

First and foremost it would have to bring the financial sector under strict public control (yes, that does imply a large, state-dominated banking and insurance industry). Then, in order to equip itself with the resources to maintain employment and demand, it would need to institute a radically redistributive fiscal programme. Finally, it would require policies calculated to sustain the viability of New Zealand’s export and import substitution sectors.

Unfortunately, none of these measures are even remotely compatible with the current policy settings of the National Party.

This essay was originally published in The Press of Tuesday, 11 October 2011.