Thursday 26 July 2012

Doing The Right Thing For The Wrong Reasons. Labours "Unprincipled" Opposition To Asset Sales.

Are You Serious, David? Labour's reasons for opposing the partial sale of state energy generators have been as inadequate as they have been changeable. It's position would be improved dramatically if the party's leaders allowed themselves to be guided by the "democratic socialist" principles set forth in Labour's constitution.

“THE NATURAL RESOURCES of New Zealand belong to all the people and these resources, and in particular non-renewable resources, should be managed for the benefit of all, including future generations.” In any debate over the merits of public versus private ownership in New Zealand one might assume that these words, taken from the second, “Principles”, section of the Labour Party Constitution, would constitute the bedrock of the Labour Caucus’s argument.

For, surely, if any resources belonging to the people are alienated from the people, then they should be restored to the people. Indeed, such restoration should be mandatory given Labour’s “principle” that: “All people, either individually or in groups, may own wealth or property for their own use, but in any conflict of interest people are always more important than property and the state must ensure a just distribution of wealth.”

If ever there was a “conflict of interest” between the right of the people to benefit from the resources they own, and the right of wealthy individuals to convert public resources to private profit, it lies in the struggle over the partial sale of state-owned energy generators. On the basis of its founding principles, Labour’s position on these asset sales should be very simple and very clear. First: The assets belong to every New Zealander and should not, under any circumstances, be sold. Second: If the assets are sold they will be repurchased by the state at the earliest practical opportunity.

On this issue, Labour’s principles do not permit very much in the way of wiggle-room. If it is the obligation of the state to ensure a just distribution of wealth, then it is vital that the citizens’ access to something as important as energy not be restricted or rationed according to their ability to pay. The right of commoners to gather firewood on the lord’s estate was recognised as far back as the middle ages. To deny people the means of lighting and heating their homes, and cooking their food, was simply unthinkable. In the social-democratic New Zealand of 1935-1975, the successors of those medieval barons were required to pay their workers “a living wage” which incorporated the cost of energy. Massive state investment in hydro-electric power schemes from the 1940s to the 1980s made this possible by ensuring all New Zealanders had access to cheap and abundant electrical power. A Labour Party committed to its constitutional principles would make energy security a cornerstone of its appeal to Twenty-First Century voters.

Why then did the Phil Goff-led Labour Caucus shy away from basing its opposition to asset sales on the Labour Party’s constitutional principles mandating the public ownership of natural resources and a just distribution of wealth? And why hasn’t its successor, the David Shearer-led Labour Caucus, made a point of re-stating the party’s “democratic socialist” commitments? Could it be that Mr Shearer and his colleagues no longer subscribe to those beliefs?

From the very beginning of this latest privatisation drive Labour’s parliamentary leadership has offered a bewildering combination of explanations as to why the state-owned electricity generators should not be sold. Initially we were told that the energy assets were too profitable to justify privatisation. That the dividends they paid to the Treasury were so substantial that it made more commercial sense to simply borrow the sum any asset sales were likely to realise from international lenders. Then we were told that the sale of the state’s energy generators would see the shares in these strategic infrastructural assets being flicked on from domestic to foreign investors. Now we are told that the National-led Government’s efforts to ensure that most of the shares remain in Kiwi hands can only be achieved by ordinary taxpayers subsidising the Government’s “Loyalty Scheme”. Most importantly, however, from the point of view of first principles, New Zealanders have been told repeatedly that the Labour Party can give no guarantee that a future Labour Government will buy back the private sector’s shareholding in the state’s energy generators.

This refusal to commit to renationalisation is explained, in part, by Labour’s 2010 decision to exclude energy generation from the “closed list” of strategic infrastructural assets that the party’s economic policy-makers had recommended be run “in the New Zealand interest” and which foreign investors should be debarred from purchasing either in whole or in part (see here and here).

A more honest explanation for Labour’s refusal to endorse renationalisation, however, is simple embarrassment. Most Labour MPs would feel “na├»ve and stupid” advocating such a policy. Business leaders, civil servants and academics would ridicule their “1930s thinking” and they would be branded dinosaurs by their right-wing opponents in Parliament and the media. Labour’s Constitution may still declare that New Zealand’s natural resources “belong to all the people” and avow the state’s duty to “ensure a just distribution of wealth”, but the sort of people who make up Labour's current caucus are no longer prepared to pay even lip service to such “principles”.

That is why the Labour Caucus’s opposition to asset sales rings so hollow, and why the justifications for its position on this issue have been so inadequate and so changeable. Ideologically-speaking, the views of the party’s current MPs are little changed from those of the men and women who introduced and supported Rogernomics (and initiated the policy of full-scale privatisation in New Zealand). They no longer believe that the opportunities for private individuals to profit from the existential needs of their fellow human-beings should be progressively diminished and, ultimately, extinguished. The duty of twenty-first century policy-makers, as they see it, is to inform and expand the choices of free individuals operating in free markets. The only real difference between Labour’s spokesperson, David Parker, and National’s Finance Minister, Bill English, is that the former sees the state playing a much greater role in informing and expanding those choices than the latter.

Labour Party members should be on their guard. The weird peregrinations of their parliamentarians when it comes to explaining their opposition to asset sales is proof that their hearts are not truly in the fight. Eventually (and it may be sooner rather than later) the Caucus and its advisers will realise that the policy preferences of “modern social democracy” are incompatible with Section Two of Labour’s existing Constitution. Like Tony Blair, they will insist that the old commitments to wealth redistribution, public ownership and the “principles of democratic socialism” generally, be jettisoned in favour of a “new” Labour Party.

One that even Tories can vote for with a clear conscience.

This posting is exclusive to the Bowalley Road blogsite.


Adrian said...

There are lots of reasons for opposing assets sales and labour are pointing them all out, in order to persuade as many people as possible that they area bad idea. This is an obvious thing to do. It hardly seems likely that they would be better off just opposing them in principle and ignoring the real, practical drawbacks of the sale. On top of which, they are aiming at a moving target, as the government's justification for the sale changes almost daily.

Chris Trotter said...

Would it not make more sense, Adrian, for Mr Shearer and his colleagues to start from first principles and then move, tactically, to make the subsidiary arguments?

I'm confident most New Zealanders share Labour's traditional beliefs when it comes to public ownership and wealth redistribution.

A strong commitment to these principles would make Labour's arguments clearer and more compelling. The whiff of the boardroom about Labour's pitch - especially in this time of deepening financial crisis - makes voters nervous.

Has the parliamentary party really seen the error of its 1980s predecessor's ways?

tiger Mountain said...

You’re getting closer to the truth of Labour’s inbuilt structural problems with each recent post Chris.

Labour members I know, some reasonably senior, tend not to address your substantive points, but do dismiss you they tell me because:
• you are a ‘gun for hire’ columnist
• you don’t fact check or engage with Labour people before publishing
• NLP/Alliance baggage

Chris Trotter said...

I'm sure you're right, Tiger Mountain. Although they didn't seem to mind that I was a "gun for hire" columnist in 2008 - and about the only one firing bullets at Labour's enemies rather than at Labour itself.

I fact-check and talk to Labour people all the time. My critics simply don't like the facts that I unearth - or the people I talk to!

Olwyn said...

Good on you Chris, for holding parliamentary Labour to account. Asset sails are not the only thing about which they are equivocal; even Shearer's support for extending paid parental leave came with a "thrift" caveat. The conciliatory position that they presently occupy is like a conciliatory position between a seal and a man holding a club: you might be able to mouth certain words, but you cannot side with the seal at all unless you stand up to the man holding the club.

Bored said...

The neo libs dont like talking about "rentier" behavior which the classical economists described as destructive to a productive economy. Adam Smith would have regarded the electricity SOEs as rentiers and demanded regulation to protect productive capital from monopolistic / cartel practices. Labour appear to me to be economically illiterate, none of the leaders have even the slightest inkling of this argument or we would have heard it.

Fortunately Labour have not advanced this argument as it is pro private capital as opposed to the very definite Labour principles of public ownership. What is demonstrated however is that Shearer and Parker are decidedly divorced from Labours guiding principles AND frame their economic thinking on neo lib dogma.

Anonymous said...

I am not a fan of the arguments to keep assetts on the basis they give us a good financial return.

Indeed in earlier times these assetts were seen as best kept in public ownership because they could provide electricity efficiently and at the lowest possible price to the people - something the private sector has never been able to do, and never will be able to do.

Since they have been turned into SOEs the rate of return on capital and the dividend to government has become paramount while ensuring everybody has access to affordable heating, providing jobs and training, reinvesting in the most sustainable forms of energy or being accountable to the consumers who own them have totally disappeared from their priorities.

I am opposed to the sales despite the fact that the SOEs are rip off organisations, terribly managed and followers of the worst possible corporate management practises. My opposition is not because they are money machines who produce a great return to the government but because they should be part of the commons and used to the benefit of us all and because that was the basis of the original state investment in them.

The Labour and Green politicians who put commercial arguments at the centre of their case to keep the assets disgust me and I would far sooner see them base their opposition around the principles that are embedded in Labour's constitution and in the Green's guiding principles.

You are right to about how uncomfortable Shearer is when speaking in opposition to the sales. He is clearly enthralled by big business and very uncomfortable at not being allowed to grovel before them on this issue like he does with pensions.

Christopher said...

I am a little puzzled, Chris. What is surprising? What justifies the current blend of disillusion and indignation? Are you in danger of a burn-out? Or do I fail to understand the pressures of being of the media?

Patently, Douglas and his cabal sold the Labour Party to capitalist interests, including their own. The words on the page didn't matter to them, or to Labour Governments since. I remember laying out a railroad track of sold public assets in Cathedral Square, back when only the Alliance continued to hold out hope. That's how the Alliance got its kick-start. As a Green then, I thought we had enough common ground on public ownership to justify a merger. We came, for other good reasons, to separate ourselves from. It was a damned shame, to have to come to that, but there you go.

The Nats have no need to outflank an opposition that remains pinioned on the consequences of Douglas's self-serving guile. It can't change without tearing off a wing. One, or the other, and it can't afford to lose either. Of course they are unprincipled, Chris. Nothing has changed for Labour. It must be hell to have principles in there.

The Labour Party is on a low slow decline. Its support will continue to ebb. Small wonder the Labour politicians are edgy about the Greens. They will never return to power without them.

Greens have known since the beginning that they had to overhaul the Labour Party as the 'preferred opposition' to National. They are doing it strategically. They will get there, and Labour will sink into a rump. The real future problem is that the Greens will centralise themselves so much as to repeat the Labour Party's error.

This was all anticipated long long ago. When the Green Movement agreed, at a conference in Nelson, to align itself with the fledgling Green Party, concerns were expressed that the inevitable institutionalisation of values would vitiate the full strength of the Green message. And it has. The Green movement of course continues, and remains our only non-Parliamentary hope for the future.

Public ownership of everything is everywhere up for private grabs. Only public adoption of a radical vision will suffice to spark an end to exploitation, endless until the resources are either all run out or coalesced into hundreds of trillions of dollars stacked in tax havens by those who pay no tax at home. Or of course both. Key and English appeal to the public's greed, and who can argue with that and get back in? Not a Labour party hack, that's for sure. "Stop being greedy" shouts Labour leader. Yeah, right.

It's all playing itself out, Chris. Being a political commentator has more than a few wearisome moments, no doubt. Recall the spririt of "Bowalley Road", and be brave.

Kat said...

Chris, don't want to let the cat out of the bag but keep up the good 'road testing' work. It certainly gives Labour an insight into the current level of Nat party intelligence as your comments continue to draw out the trolls from the right.

Anonymous said...

Kat, Labour and insight would appear to be an oxymoron. Chris is coming up with positive actions they could take but they just keep their hands over their eyes and ears.

Olwyn said...

@Kat: I have spotted a spelling error in my post, so perhaps you take me for one of the low calibre trolls from the right. Low calibre I may be, that is a judgement call for someone else to make, but I am certainly not a troll from the right. Neither are most of the other commentators here, whose views are familiar to me.

Whether you like to think so or not, there is quite a bit of concern on the left about Labour's apparent rightward turn. No one knows how far it goes since it is not made explicit, but there are enough clues around to have people worried. Trust is based on judgement, not emotion. It is up to the LP caucus to win our trust, not up to us to donate it to them.

Anonymous said...

they didn't seem to mind that I was a "gun for hire" columnist in 2008 - and about the only one firing bullets at Labour's enemies rather than at Labour itself.

Damn fricken right. Talk about biting the last remaining finger of the hand that feeds you - some of these Key-lite lard-buttocks need a severe history lesson to remind them of the blood and tears legacy that they lounge in and are squandering.

They've learned nothing from the Helen appeasement years and continuous media onslaught.

Staunch has given way to paunch: and the vultures are salivating at the scent of weakness.


Kat said...

Well the latest msm approach is 'lets hedge our bets and back Shearer to be the 'accidental' next PM'. Pointing out polls that show Keys drop in popularity with the women of the country but no recognition of Shearer having any impact himself. Yeah right!

Its the stupid, greedy middle class 10% of that infamous 48.7% that make up the ill informed, stuff you Jack, pathetic wannabe 'brighter future' people in this country at present that believe anything that is on the 6pm news, the newspapers and reality TV that will determine who is the next PM.

I want Ian Fraser's pupil to succeed though!

Tim G. said...

And who is hiring you gun at the moment, Chris?

You've decided to dedicate more than 50% of your time to maligning and smearing the Parliamentary wing of the Labour Party. You are content to ignore the realities of modern politics in advancing your half-baked theory that the current LP is a bunch of evil Roger-gnomes, baying for their first opportunity to sell the country out. It would almost be cute, were it not so tragic, that the best evidence you provide of this is links to your own previous (opinion) posts.

Do you honestly think that pulling out their membership cards and pointing to principles is going to win the hearts and minds of the public and the media? Do you really believe that the majority of NZers would be spurred to action and fall behind a Labour Party that politicked like that?

You live in a dream world if you believe that Shearer breaking into the Internationale would motivate NZers to vote for him, or appease your chums in the media in some regard. All of the LP publicly identify themselves as "social democrats", but can you imagine the vitriol that would pour if they went around declaring themselves socialists? That language (for the wrong reasons, perhaps) is not acceptable in contemporary political debate. Perhaps it should be, but it's not.

And as for the continued calls for Labour to declare it will buy back the assets, consider this:

a) Nationalisation/buying back at costs would violate several (scum-sucking, neo-liberal) treaties on international trade. The NZ government would end up in the gun of expensive litigation of the type that the Australian Government is currently facing from Big Tobacco for daring to change their laws; and the alternative

b) Announcing they will buy back at the market value would cause the share value to soar once alienated from the public.

You don't want to think about this reality, because it is so much more fun to cast the parliamentary LP as evil Rogernomes. But when you strip away the "anonymous sources" in the Labour Party, you have not a shred of evidence.

You really think they want the assets sold, huh? That's why they keep campaigning against it?

Until you produce something more than hollow smear, your calls will continue to resonate with hungry right-wing trolls, a gullible media, tin-hatters and the vacuous. It is such a waste of columnist who wishes to be a champion of socialism that he has nothing better to do than tear apart other forces of the left.

Chris Trotter said...

The problem with your "argument", Tim G, is that it boils down to 1)
an appeal to stop analysing the behaviour of the Labour caucus (the only group at all likely to be in a position to effect real social and economic change) and 2) to advance the cause of socialism by refraining from advocating anything remotely socialistic.

A bit silly really.

As for all these alleged "smears". All I can say is that, as a columnist, I base by opinions on what politicians actually say.

If David Parker tells a group of businessmen that the state-owned electricity generators are not businesses that Labour believes must be kept in public hands, then I try to understand how he can hold to that view while his party loudly proclaims its opposition to privatisation.

It makes me wonder whether the Labour Opposition's "No Asset Sales" campaign might be more than a little disingenuous. Could it simply be that they know the assets will be sold regardless of protests, petitions and Maori Council interventions; they have no intention of buying them back; and so the entire exercise is about applying a little crimson make-up for the punters, and then wiping it off when there are no longer any assets to save?

I can assure you, also, that my informant on concerns about a repeat of "Rogernomics" is very real (and known to many people inside the NZLP). You must realise that I am by no means the first journalist to protect the identity of my sources.

Your point about nationalisation is well made, but were I, or any social-democrat, to accept that the renationalisation of assets, sold in defiance of public opinion, cannot be repurchased at cost for fear of the WTO or some future TPPA-type agreement, then we would be admitting that the pursuit of a democratic socialist programme has become impossible.

But, nothing in politics is impossible. There was a time when the neo-classical economic views espoused by men like Hayeck and Freidman were considered anachronistic and "impossible".

They disagreed.

I will continue to base my politics on principle, Tim G, because the alternative - NOT basing your politics on principles, or, worse still, constantly changing your principles according to the ill-informed views of the latest focus group - is not only destructive of personal integrity and political party unity, but ultimately of the entire democratic system itself.

That may suit someone who feels comfortable about surrendering his nation's sovereignty to transnational corporations, but it doesn't suit me.

Olwyn said...

@ Tim G: If you read around a bit, you will see that Chris is not a lone voice in expressing mistrust of the present parliamentary Labour Party. To begin with,after parading the potential leaders around the country, they went on to choose the one that the members, by and large, rejected, perhaps in part because he was an unknown quantity. His "unknown quantity" status remains unaltered, and the clues that issue forth tend to be at least right appeasing, if not right leaning. So speculation as to where they guy stands is very much to be expected. No one expects Shearer to break into the Internationale, but those on the left and those who are presently suffering do expect real hope to issue from a party that claims to be the main party of the left. Yes, there are limits to what can be done, but it is is also possible to put pressure on those limits. In its courting of favourable media coverage, Labour seems rather too ready to allow the left side of the debate to be consigned to the margins. You should remember that people who are suffering are sensitive to nuance, and are quick to note the difference between "I feel your pain" and "I am committed to alleviating your pain." Furthermore, anyone who aspires to public office ought to be able to answer forthrightly to challenges,not sulk, evade and obfuscate if anyone dares to challenge them.

From my own perspective, I am more concerned to be honestly assured that the Labour Party is still the Labour Party than I am as to who wins the next election. It is of no solace to me if tories in red ties get to further their careers.

jh said...

"The assets belong to every New Zealander and should not, under any circumstances, be sold. Second: If the assets are sold they will be repurchased by the state at the earliest practical opportunity."

perhaps I have got you wrong Chris but aren't you in agreement with John Moore:

“Both in New Zealand and globally, the best of the leftwing tradition has always rejected small-minded nationalism, xenophobia and racism. In fact, leftists of an internationalist tradition have always favoured globalization and getting rid of national borders and barriers to migration. Progressive advocates of globalization of course do not defend a handful of rich imperialist countries, including New Zealand, dominating the world’s economy, but instead advocate an integrated and radically egalitarian world economy where production is based on social need and not on private profit. ”

because if it is o.k to talk about our assets but not "my country" then our assets are also any citizens of the worlds assets.

I've got to say that I'm disgusted at the way the left has allowed immigration to be disconnected from any discussion about house prices.
I've been watching TV3, TV1, listening to radionz.....

JESSICA – Let’s talk a little bit about that population spread. Why are so many people moving to Auckland?

PAUL – Well, Auckland – there’s an agglomeration effect, so the bigger Auckland becomes, there more attractive it becomes. It becomes more attractive economically, but it also becomes more attractive as a place to live. And so we’re seeing the sort of perimeters of New Zealand, the regions, beginning to flat-line, so they’re not growing, and we’re now beginning to see the first of regions beginning to decline.

You'rw all as usefull as tits on a bull.