Tuesday 8 December 2009

Ten Years Ago This Week: "National Capitalism"

National Capitalism: This British Conservative Party poster from 1909 criticises the Liberal Chancellor of the Exchequer, David Lloyd George, for failing to protect British jobs by imposing tariffs on imported goods.

MRS SHIPLEY’S reconfiguration of the National Party’s front bench notwithstanding, the Centre-Right faces some daunting challenges over the next three years.

What sort of party does it wish to be? A mass party, with deep roots in the community and a membership broadly representative of the New Zealand population? Or, a cadre party, tightly organised around an ideologically coherent set of policies and staffed by highly motivated individuals drawn from a narrow segment of society?

If National wishes to reconstruct its mass base it will need to reconsider a great many of its present policy positions. More significantly, it will have to abandon the laissez-faire paradigm in favour of either a genuinely liberal, or a recognisably conservative, political philosophy.

The laissez-faire doctrine is simply too destructive a creed for any political party to pursue for more than a few years. Karl Marx’s Communist Manifesto identified the all-consuming dynamism of unrestrained capitalism as long ago as 1848 – only a few years after the British Tory Party had been broken in half on the rock of "free trade". In the years that followed, the British Liberal Party also learned to fear the destructive side effects of laissez faire – especially its ability to mobilise the "lower orders".

By the end of the 19th Century both the Conservatives and the Liberals had moved towards a more durable set of political themes. Disraeli’s "One Nation" Conservatism sought to smooth over class antagonisms by enlisting the whole electorate in Britain’s imperial adventure, while Asquith’s "Social Liberalism" attempted to pre-empt the appeal of socialism through a series of radical social reforms.

Margaret Thatcher’s revival of laissez-faire economics in the final quarter of the 20th Century was a retrograde step for the Conservative Party – fatally undermining its mass appeal. Only the extraordinary weaknesses of Baroness Thatcher’s opponents permitted her party to rule for such an extended period. Today, it is a moot question whether the British Tories will ever again secure a parliamentary majority.

In the 21st Century, the chief dilemma confronting a party calling itself "National" will be whether to embrace "global" or "national" capitalism. A majority of the present leadership of the National Party appears to favour the former, a position which aligns it very closely with the ACT Party.

In practical terms this means that both National and ACT are bound to promote policies which facilitate the dominance of transnational – as opposed to local - capitalists. New Zealand under National/ACT leadership would become even more of a "branch office" of the Australian economy than it is now - with a corresponding intensification of the already quite strong push in right-wing circles for New Zealand to "merge" with Australia.

This is hardly the sort of programme a "national" party could hope to adopt with any realistic prospect of electoral success.

By embracing "national capitalism", however, the Centre-Right could once again carve out a political position with genuine mass appeal. A "New Zealand Incorporated" approach, encompassing a judicious measure of state intervention and exhortation – along the lines of Singapore, South Korea and Taiwan – has the potential for building a political constituency of election-winning dimensions. At present only Simon Upton and Bill English appear to have grasped this possibility.

The irony, of course, is that "national capitalism" is precisely what Winston Peters has been advocating for the past decade. By banishing Peters, National lost the only charismatic politician it possessed with a compelling vision of the future. Even more astonishingly, by breaking up the National/NZ First Coalition Government, Mrs Shipley not only guaranteed National’s defeat, but also handed Labour and the Alliance the opportunity to make "national capitalism" the Centre-Left’s winning electoral formula well into the next century.

This essay was originally published in The Dominion of Friday, 17 December 1999.


Anonymous said...

Not much changes really.

With characteristic perversity, I've long maintained that Social Democrats (amongst whom I number myself) are the true 'small c' conservatives.

In the tradition of Edmund Burke , we are sceptical of both excessive individualism and
excessive collectivism and we reject both the market place and the military command structure as our automatic default social models.

Above all, we are conscious of the social capital that is the hard won fruit of centuries of cooperation and of living together in organisms larger and more complex than extended families. My apologies for the length of that sentence. It's an inbuilt defect when in Burkeian mode.

National Capitalism (with a large neo-Keynsian dollop) is the most effective means of pursuing 'small c' conservative and/or Social Democratic values in the sphere of economics.

But its application is beset with problems. The most obvious is the continued global dominance of the neo-liberal consensus.

Another, in New Zealand's case, is that we're an immigrant nation and immigrants, by their nature, tend to be individualists and natural neo-liberals. I know that of which I speak, having been one.

Most important of all , there is the potential contradiction between national capitalism and the cultural liberalism and internationalism that are also among the bedrocks of a civilized community.

In my more generous moments, I often suspected that Clark, Cullen and Anderton were all dimly aware of these truths if insufficiently resolute in tackling them. But I sense no sign of such insights in our current government.

As I wrote in another post, however, John Key may still be an ideological work in progress. I doubt that he will 'Dish the Whigs' in Disraeliean mode. But I do not discount the possibility.


Unknown said...

Good idea Chris.

This walk down memory lane has been very interesting.

I Can recall vividly a column that you had published in the Independent in 1996 or so where you stated that the new left were the community minded people. Whereas before it was all about workers verses employers from now on it was about those who wanted to network verses those who wanted to maximise their individual wealth. It struck a real chord with me, from memory it was published at the same time as Putnam's "Making Democracy work".

I would suggest that you put this up next. It will at least for me invoke a great deal of thought.

Kasper Kulak said...

The term laissez-faire capitalism means a system of government that is totally hands off from the economy. A split in economics and state similar to the one with church and state. It is system where the governments role is to protect the inalienable rights of the individual by providing, law courts for the upholding of contracts and for law suites, police force and military. To ascribe this concept to the National party is an error both historically and today. National has never, ever been a very capitalistic party. Indeed National is more business than labour, but laissez fair capitalism has serious points of depature from the business round table. For example under the concept of this type of capitalism there would be no special interest groups, no lobby groups no legislation governing competition or redistributing wealth. National is a light form of Labour, in my opinion.

Jameson said...

National is to laissez-faire capitalism, as Michael Cullen was to Adam Smith.