Friday 5 October 2012

A Red Tory/Blue Socialist Coalition?

Red Tory: NZ First has always won more support by tacking to the Left than it has from backing the Right. Sensible conservatives, like sensible social democrats, understand the need to keep Capitalism on a tight leash. That makes Winston Peters' natural ally Labour - not John Key's National Party.
NEW ZEALAND FIRST has some serious thinking to do. As the National Party’s electoral support continues to erode (to 43 percent in the latest Roy Morgan poll) Winston Peters’ political options become decisive.  Only NZ First is positioned to pivot between Labour and National in 2014. The Greens’ abhorrence of National’s second-term policies has shackled them to the Left in ways which Labour is beginning to find unnerving. No less than John Key, David Shearer must be calculating the price of securing NZ First’s support in two years’ time.
But, if Mr Peters is guided by experience, the choice between Labour and National will be simple. Mr Key’s second-term government is an unashamedly neoliberal affair and a very uncomfortable fit with NZ First’s nationalistic populism. To win mass support, NZ First must tack to the left – not the right.
That a turn to the Left is the best choice he could make may not be immediately apparent to a classical conservative like Mr Peters. The National Party was where he won his political spurs and, like a young man’s first love, will always enjoy a special place in his heart. But, as Mr Peters is fond of pointing out, the National Party of John Key is not the party of Sir Keith Holyoake or Sir Robert Muldoon.
They were what social historian, Dr Chris Harris, calls “Red Tories”: conservative politicians who fear the social division and disintegration which unfettered capitalism inevitably produces.
Because working-class men and women have scant reason to support an economic system that lashes them for being poor, the Red Tory believes it’s in capitalism’s long-term interests to guarantee every citizen a reasonable standard of comfort. Like Mr Peters himself, they subscribe to the “One Nation” conservatism of the nineteenth century British statesman, Benjamin Disraeli, striving to bring all classes together in the tight embrace of an all-inclusive nationalism.
But, if Mr Peters is serious about putting capitalism on a leash, he must acknowledge the primacy of politics over economics. Yet that is something his potential allies in Mr Key’s National Party will never tolerate. The Prime Minister and his colleagues are all free-market men: “Blue Tories” who put economics first, and whose unwavering belief in an unfettered capitalism leaves no room at all for the Red Tories’ heavy-handed regulation and protectionism. Any coalition agreement which made provision for such economic heresies would, like the National-NZ First coalition agreement of 1996, be broken almost as soon as it was signed.
Labour offers NZ First much better prospects.
Reading the speeches of Davids Shearer, Parker and Cunliffe; it is clear that Labour still favours a “New Zealand Incorporated” approach to economic management. Equally clearly, however, they’re unwilling to admit that such a policy would also necessitate putting politics ahead of economics. As a concept, NZ Inc. presupposes that it is possible for all the factors of production to be brought together for the purposes of generating a healthy national dividend – payable to every citizen. That this would involve some form of economic planning, and some sort of mechanism for ensuring everybody stuck to the plan, smacks too much of socialism for today’s Labour politicians’ comfort.
They’d prefer New Zealand’s capitalists to simply fall-in with Labour’s plans voluntarily, because they represent sound economic sense. Since this is about as likely as Paula Bennett authorising a Christmas Bonus for solo mums, Labour’s “Blue Socialists” and NZ First’s Red Tories should be encouraged to embrace the primacy of politics together.
Mr Peters and his colleagues will have to lead the way, because only by demonstrating the Red Tory populists’ power to mobilise the non-vote will Labour be persuaded to step out of its “No, no, we’re responsible economic managers” comfort zone and take the fight to the Blue Tory defenders of free-market economic orthodoxy.
The beauty of a Labour-NZ First coalition for those capitalists capable of taking the long view is that it asks nothing more of them than a willingness to admit that they, too, are a part of the nation, and that, like every other citizen, they have responsibilities as well as rights.
It’s a simple proposition: For capitalism to function effectively in New Zealand it must acknowledge that there will be times when, to preserve social cohesion and deliver social justice, people must come first and money second.
This essay was originally published in The Waikato Times, The Taranaki Daily News, The Timaru Herald, The Otago Daily Times and The Greymouth Star of Friday, 5 October 2012.


mugly2k said...


I admire Winston Peters for his ballsy guerrilla politics and passion but I'm afraid his biggest obstacle isn't which party to go with but himself. He's a slave to hubris. That was very clear on TV towards the end of that election where he gave NZ First's deciding vote to National and he became the deputy prime minister (correct me if I'm wrong). He oozed pure arrogance. You couldn't channel Julius Caesar any better than Winston did in those TV moments. All that was needed was an olive wreath and a Roman salute, to complete the picture. Unless he controls his ego (like the oh so deadly, calculating machine John Key) his natural charisma and other assets are of little value to either party.

Victor said...

An excellent piece, Chris.

I note that Disraeli is in fashion this week, with Ed Miliband citing him approvingly at the UK Labour Party conference.

I'm not, however, convinced that NZ First will be in the next parliament.

Winston is not the man he was and the rest of his caucus have yet to show any significant signs of life. Even Andrew Williams is strangely restrained.

Things might be different if Ron Mark was again part of the show. But that's an unlikely prospect at present.

The other problem facing NZ First is that Labour is vaunting its readiness to change Super.

Winston's faithful might think twice about voting for him if they thought a Super-wrecking government would be the result.

Brendan McNeill said...

Hi Chris

I find it somewhat ironic that the left should be lecturing market capitalists on their need to embrace their social and economic responsibilities over their rights.

You are presumably referring to those people whose capital is at risk funding New Zealand businesses that generate employment, pay taxes, and create wealth and largely pay for the social services that are enjoyed by all New Zealanders?

There are plenty of New Zealanders who have chosen to invest their capital overseas rather than in the local economy, so perhaps your comments are more directed at them?

It might be instructive for the left to ask these people why they have chosen to invest off shore, rather than back home in NZ.

In any event I'm sure that those of us who have invested in New Zealand businesses are grateful for your reminder.

The real problem, as one commentator recently observed, is that market economies are not capable of delivering the level of wealth necessary to fund the aspirations of democratically elected socialists, even with punitive taxation of the rich.

Consequently, western governments everywhere have been spending the next generations wealth by way of massive borrowing, to keep the greedy and restive masses in a standard of living well beyond their individual and collective productivity and material contribution.

This of course is an end game which has all but played out in Europe, which is soon to play out in the USA, and will all too likely happen here in NZ as well.

It won't matter who gets elected, if we don't engage in fiscal responsibility now, there will be nothing to redistribute tomorrow.

From what I can see, the baby boomer generation of which I'm a part does not care too much about cheques bouncing tomorrow, just so long as they don't bounce today.

Which is why we elect profligate politicians, and rather than hold them to account, willingly accept their largesse at our children's expense.

And your political remedy is what? The same but only more so?

Anonymous said...

Why would anyone on the left want capitalism to function effectively?

When has capitalism ever delivered social justice or social cohesion (other than in the minds of a few deluded social democrats who think the 1950s was some sort of golden era)?

A capitalist economy is specifically designed not to do either of those things and would most certainly be judged as not performing effectively if it were.

peterpeasant said...

Your final two paragraphs display an optimism i wish I could share.

Methinks the pic on your previous post (kiss of fealty) sums up the position of "westernised" govts everywhere (not just NZ) in relation to ignorant fundamentalist economists.

I invite suggestions which economist Brando most resembles

Chris Trotter said...

To: Anonymous@1.35PM

What arrant nonsense.

Capitalism has raised the living standards of even its most humble servants to an astonishing degree over the past two centuries,

This fact is precisely why the parties of the Left have had such enormous difficultiy in convincing people to vote for them.

Success for socialist parties will only come when they build upon the economic success of Capitalism to agitate for a world which is morally and not just materially wealthy.

It is on the scores of Justice and Compassion that Capitalism falls short, and until the searchlight of democratic politics is trained upon its deficiency in those crucial virtues, then its purely material triumphs will continue to carry the day.

Brendan McNeill said...


I appreciated your reflections on socialism and capitalism. You say:

"It is on the scores of Justice and Compassion that Capitalism falls short"

It might surprise you but we are in agreement on this.

What I'd suggest however is that market capitalism is an economic system sustained by a legal framework that supports property rights, the rule of law, and enforceable contracts.

Justice and compassion on the other hand are moral virtues unique to human beings and are expressed in the way we relate to each other both individually and corporately. They are neither capitalist or socialist in their DNA - they are human expressions.

People who are capitalists or socialists are equally capable of expressing or denying justice and compassion as any brief examination of world history would demonstrate.

What I think socialists mean when they speak of justice and compassion, is the State mandated coercive redistribution of individual wealth from high income earners to medium, low and no income earners.

Justice and compassion to the socialist mind appears to be 'equality of economic outcomes' mandated and overseen by the power of the State.

In effect they bypass the family as the primary and traditional source of welfare and compassion, and substitute the State.

Here in New Zealand all major parties have subscribed to the socialist view point, the only debate is about the amount of re-distribution and to whom, students, middle income families, beneficiaries, supernatants etc.

You have to work very hard in New Zealand these days not to be receiving some kind of direct State funded assistance!

This is why I say that the socialists have won the day, and really you should be delighted. This is your golden hour, this is as 'good as it gets'.

However, the problem with socialism as Margaret Thatcher once said is that 'sooner or later you run out of other people's money'.

If you look at the Western world, we are well into 'later' and this golden age built upon borrowing and redistribution is drawing to an end.

It will be interesting to see what emerges.

Chris Trotter said...

When Capitalism was kept on a tight leash - as it was for the 30 years after World War II - the living standards of ordinary people all over the world rose dramatically.

When it slipped the leash in the 1970s and 80s it ushered in 40 years of declining or flat real incomes and rising social inequality.

That's what's required now, Brendan, a re-fastening of the leash. The alternatives are bleak: either the dog will devour its handler, or the handler will shoot the dog.

I'm pretty sure you'd prefer the pooch to keep on breathing, so, get with the programme.

guerilla surgeon said...

Margaret Thatcher as with most of the right was great at cute bullshit epigrams, less good at running a country.

Anonymous said...

I would have thought that socialism was the attempt to eliminate the free lunch enjoyed by usurers, rent seekers, and other coupon-clipping bludgers.

Brendan McNeill said...


I agree that there has been rising economic inequality over the last few decades. However I'm less convinced that the blame can be laid solely or even primarily at the door of capitalism and market economics.

Yes, there is some greed and a sense of entitlement throughout our culture, but it exists across the social and economic spectrum, and is not limited to those who espouse market economies.

I believe, the issues are more existential in their nature, but the outcomes are just as practical.

The sexual revolution of the sixty's saw the gradual decline of marriage as a pre-cursor to child bearing in NZ to the extent that approximately 50% of children today are now born outside of marriage.

Today, almost 25% of new births are to mothers who belong to the 100,000 single parent fatherless households on State funded welfare, living in relative poverty.

These children end up with fewer educational opportunities, are more exposed to violence, neglect and other forms of abuse, and often grow up resenting 'the system' alienated, affected by poor health, substance abuse and worse.

These children and young people represent the 'long tail' of underachievement in New Zealand's education system that defies all attempts at remediation.

The production of what is effectively a growing 'underclass' in New Zealand has been in progress now for at least thirty years. When confronted with these facts, it's difficult to avoid the conclusion that the policies that have created this underclass have contributed to NZ's decline in economic performance when compared to other OECD countries during that period. Furthermore, they have created the economic and social inequality about which we are all rightly concerned.

But what to do?

I don't think we are going to resolve the existential problem any time soon, so we can continue to expect most NZ children to be born outside of marriage for a long time to come.

The question we do need to ask is, have we reached the end of the social experiment founded in the early 70's where the State assumed the role of parent to fatherless children?

Can we accept that the unintended consequences of those policies have created the underclass that now drags down NZ's economic performance relative to our trading partners, and is creating the kind of inequality which like you, I suspect will ultimately result in social unrest.

Or, do we still think that 'more of the same' will one day produce a different outcome?

There is no immediate short term fix, but we do need to re-think the policies that have created this high level of economic and social inequality in which we find ourselves.

The first surely has to be the recognition that the State makes a very poor, and very dysfunctional parent, with all of the unintended consequences I have just outlined.

Simply continuing to increase taxation on 'the rich' and redistributing to the poor without addressing some very deep social and structural changes will prove entirely ineffective, and will drive down the standard of living of all New Zealanders.

At least those who remain.

guerilla surgeon said...

F' god's sake, the sexual revolution missed much of Asia and they have exactly the same problem with inequality rising.

Kat said...

Not so much 'capitalism' rather rampant unregulated financiers is where the market has failed.

Winston nailed his colours to the mast with the Wine-Box investigations. He will want to go out of politics on a high note, not the flatulent stench if he associates himself with Key and his cronies.

OneTrack said...

The trouble is your essay left out the three other major players - the Greens, Mana and the Maori party. While Winston might be able to handle working with Labour again (and they with him), I dont quite see the same opportunities with these others. How long would you see such a coalition actually lasting (who would be Minister of Finance for a start?) and how much permanent damage would they be capable of inflicting on New Zealands economy in that time?

Chris Trotter said...

To: One Track

The Greens and Mana would not be part of the government I am suggesting. It would be a Labour-NZ First coalition only.

The Greens and Mana would have the options of either providing such a government with critical support, or, precipitating a new election in which they would be wiped out.

By aligning itself with NZ First exclusively, Labour would force the Greens further to the Left, incentivising a serious effort to recruit the tens-of-thousands of 2011 non-voters.

This strategy would relieve the competitive pressures Labour is currently experiencing in the quest for middle-class votes.

Facilitating the organisation of genuine political pressure from the most disadvantaged New Zealanders would also permit Labour to present itself as the moderate electoral choice - sensibly channelling the rising clamour for radical change into progressive reform.

Win-Win politics for the Left

jh said...

But, if Mr Peters is serious about putting capitalism on a leash, he must acknowledge the primacy of politics over economics.
what about the primacy of the worlds ecosystem over "economics" and as an integral part of the ecosystem the incredible hockey stick in the human population?

Winston Peters was vilified for his stand on immigration. The Savings Working Group (and others) have come out and blamed immigration for high house prices and making us generally economically [and environmentally] worse off than we would have been with less immigration. To acknowledge that, however would put, Labour, National and the Greens in the wrong (as in egg on face), The Australian Productivity Commission said that there was little or no discernible benefit to Australians from immigration (it had all been captured by the migrants). Forewarned? the NZ Productivity Commission set it's terms of reference such that they are are relatively uncontroversial given the desire to establish broad political support for the Commission (National, United Tobacco, Labour and Greens). Andrew King blogs that they agreed with most of the Property Investors associations submission and calls the Productivity Commission... "independent"
Somebody point out news reports from Radio New Zealand covering the Savings Working Groups findings on immigration. It is apparently (according to Proffessor Paul Spoonely because "a result of a growing awareness amongst journalists that they had a role to play in explaining (positively) the complex issues of immigration."

Anonymous said...

"When Capitalism was kept on a tight leash - as it was for the 30 years after World War II - the living standards of ordinary people all over the world rose dramatically.

When it slipped the leash in the 1970s and 80s it ushered in 40 years of declining or flat real incomes and rising social inequality.

That's what's required now, Brendan, a re-fastening of the leash. The alternatives are bleak: either the dog will devour its handler, or the handler will shoot the dog."


We now know what to do for everything to come right.

After so other many silly politicos got it wrong.

Thanks Chris.

After you and Winston have belled the cat I will be the first to shout you a beer.

Anonymous said...

Brendan, You still haven't answered the key winning point of social democratic economics; that people are better off when they're employed.

The right feign allegiance to this principle but they have only delivered it when they have embraced social democratic economics.

We have an untapped 30% of people who are chronically unemployed because their are few jobs, fewer meaningful ones and those they get offer them little hope and security.

When you present to people the argument that your way out of poverty is a good job with dignified conditions and the opportunity to own a house, you will see strong families again.

And if this is not right wing lip service but concrete social democratic policy then people will listen.

The real estate agents, loan sharks (both of the 'respectable' and disreputable varieties), the building industry and the employers benefiting from a low wage economy will fight this tooth and nail.

If you can't accept this, you have missed the essence of NZ's social and economic history as a capitalist country.

Politicians should put their money where their mouths are and do it.

You can't have it both ways Brendan; you can't crucify the underclass yet offer them no hope.

Another thing is government/business cooperation. There has to be a plan. We have to seek out markets and relate to countries via a well honed diplomatic and governmental service with business on board. This government has cut this.

You can't just say; cut spending, cut taxes, cut wages. Which is what you are always saying.

And we are blessed with a union leadership that is just dying to cooperate with government and industry. People like Bill Rosenberg, who is a sincere and thoughtful bloke.

You don't even believe unions should exist. You cling to the romantic notion that the employers state of mind is the best guarantor of workplace policy.

My experience and in the workplace and that of dozens and dozens I know has proved that the only guarantor for a stable workplace is a good faith arrangement worked out by the employers and the elected representatives of the workers.

And there is no better way for this to be hammered out than by unions and employers getting together in a spirit mutual respect (whether that comes from sincere good faith and a constructive attitude or a sense of realpolitik) or failing that, compulsory arbitration.

These are the things that build a society, your negative and unconstructive posts seem to suggest that you no longer believe in building a society.

It may look grim, but if you give up hope, it's even grimmer.

Andy C said...


Surely a typo. You say "Winston Peters’ political options become decisive." I'm certain you meant divisive.

Brendan McNeill said...

Dear andrewmahon1234

I do accept that people with socialist leanings are generally speaking people of good will.

I'm not out to crucify the underclass as you suggest, but rather to revisit paternalistic state programs that create and grow an underclass and then consign them to a life of misery, inequality and failure.

I'm happy for unions to exist - delighted even, but I don't believe in compulsory unionism, anymore than most New Zealanders.

With respect to employment, here is the dilemma we all face, left or right.

You can have close to full employment, or restrictive and paternalistic minimum wage laws, but not both.

You choose.

And here is the problem with the paternalistic socialist state:

It creates an environment where nearly 25% of our nations children (that's a huge number) are born into state funded fatherless inequality.

It then fails to educate them.

To be fair these kids have often have so much dysfunction at 'home' that the teachers job is impossible.

Then when they leave school without any meaningful skills or qualifications, minimum wage laws lock them out of any prospect of employment and any opportunity to up-skill and improve their economic circumstances.

This results in permanent inequality.

That is the glory of the present day socialist State in New Zealand.

What is left for these rejected children and young people, other than a life in the gangs, drugs and crime.

Wash rinse and repeat.

Socialists call it compassion, I call it stupidity.

The left claim that youth rates only benefit employers. That's nonsense of course. Yes, employers benefit, why shouldn't they? But so do the youth who obtain employment, gain skills, experience the dignity of honest work, and create for themselves a real stake in the future.

The economy benefits, more taxes are paid all round, and everyone wins except the gangs.

Chris Trotter said...

I have to say, Brendan, I'm getting a little tired of these fact-deficient capitalist homilies.

Your intellectual interactions with the other commentators on Bowalley Road appear to have had no effect on your view of, well, anything.

Honestly, it seems to me that you're simply posting here in the same spirit that a Mormon missionary knocks on my front door: to convert an unbeliever/s to the true faith.

You should know by now that in nearly every case that's simply not going to happen.

Perhaps you should restrict your visits to those blogsites where the chances of conversion are higher?

Mormon missionaries seldom peddle their bicycles in the shadow of a cathedral.

Anonymous said...

Whatever the arguments about youth rates are, strong families with fathers who can provide are not built on youth rates but on real wages.

Common wealth is the best guarantor of social stability, economic stability. It gives a solid tax base.

The parties of the right and far right only dole out meaningless cash because they are too scared to face the radical employers and irresponsible usurous renegades can't adapt to an economy that pays workers a living wage.

You can't have it both ways; you can't call for hopeless low wages (where a man can provide his family with something resembling a middle class life) and also oppose top ups.

And I'm glad you've changed your opinion on unions. I remember you saying that unions ganging up on workers was artificially raising the price of labour. And how unfair it was.

Brendan McNeill said...

Hi Chris

I hear you, and will peddle off quietly.

All the best to you and your readers.

Kind regards

Chris Trotter said...

Oi, Brendan, get your ass back here!

My apologies for sounding off in frustration.

You're most welcome to visit and participate on Bowalley Road - but perhaps with fewer homilies and more evidence-based criticism of the posting's subject.

It's a debate I'm after, not an artillery duel.

guerilla surgeon said...

"You can have close to full employment, or restrictive and paternalistic minimum wage laws, but not both."

Yes Brendan - some evidence for this would go down well. In the
'50s we seemed to have both. And some adressing of evidence based criticism of your homilies would be very welcome.

Anonymous said...

I find it difficult to disgree with a single thing Brendan says-as for evidence-look around you! Perhaps even teach for while and observe. Chris you talk as if the age of 1970's could go on for ever but if you try to project the politics of the time and New Zealand's direction as continuing-I just can't see how it could have happened. Greece is the best example of the result.
Personally I come to Bowalley Road (and I suspect Brendan does as well) because it's the place for some robust debate-isn't that your intention Chris?

Brendan McNeill said...

Thanks Chris

I do enjoy the robust debate here, and it is true that I have modified some of my opinions through visiting your blog. (not that you would immediately notice of course. :-)

I'll attempt to reduce the homilies and increase the facts in future.

That said, all the facts I have provided in terms of children born into poverty in this exchange are correct and can easily be substantiated if anyone cares to look.

The existence of a growing and disenfranchised underclass is beyond dispute.

The long and un-remediated tail of educational failure in NZ is beyond dispute.

Growing youth unemployment since the abandonment of youth rates is verifiable and beyond dispute.

These are bleak statistics / facts and we are all attempting to engage in dialog about the cause and how to affect meaningful change for the good of all New Zealanders, especially our youth, and those worst affected by inequality.

It's good to be back - It felt like I had never been away!

Thanks again. :-)

Anonymous said...

Brendan is the second reason I come here. Don't go you big oaf.

Surely us cloth caps can have a good old slanging match with you toffs without someone storming out.

They don't let blokes like us into the club anyway, we might spill porter on the upholstery.

Anonymous said...

They might let Chris in though aye.

jh said...

How about a verdict on NZ First.
John Carran, 2 April 1996

“Vehement opposition to immigration, particularly from Asian countries, in New Zealand from an ill-informed and xenophobic rabble persists despite overwhelming evidence that immigration will improve our long term economic prospects.

In 1988 The Institute of Policy Studies published detailed research by Jacques Poot, Ganesh Nana and Bryan Philpott on the effects of migration on the New Zealand economy. The research, which abstracted from the social and environmental impact of immigration, concluded that “…a significant migration inflow can be beneficial to the performance of the New Zealand economy and subsequent consumption and income levels.” The authors point out that this is in general agreement with Australian research on the economic consequences of immigration.

Of course there is more to life than attaining economic excellence. The social and environmental impact of immigration also needs to be considered. But here the reasons given for restricting immigration range from pathetic to extremely dodgy. Most of the accusations are barely disguised racist piffle backed by tenuous rumours and cloudy anecdotes. Winston Peters’ stirring of the masses has exposed the ignorance and racial biases of a small and distasteful section of New Zealand society. These people yearn for a cloistered, inhibited, white (with a bit of brown at the edges) dominated utopia fondly envisaged by racists and xenophobes everywhere.

With this:
Savings Working Group
January 2011

“The big adverse gap in productivity between New Zealand and other countries opened up from the 1970s to the early 1990s. The policy choice that increased immigration – given the number of employers increasingly unable to pay First-World wages to the existing population and all the capital requirements that increasing populations involve – looks likely to have worked almost directly against the adjustment New Zealand needed to make and it might have been better off with a lower rate of net immigration. This adjustment would have involved a lower real interest rate (and cost of capital) and a lower real exchange rate, meaning a more favourable environment for raising the low level of productive capital per worker and labour productivity. The low level of capital per worker is a striking symptom of New Zealand’s economic challenge.

guerilla surgeon said...

The existence of a growing and disenfranchised underclass is beyond dispute.

The long and un-remediated tail of educational failure in NZ is beyond dispute.

Growing youth unemployment since the abandonment of youth rates is verifiable and beyond dispute.

You have the effects Brendan but it's causes we need. These are the results of unregulated capitalism in my view.

Victor said...

Congratulations Brendan!

In my dreams, I resign from things and everyone immediately displays contrition and invites me back.

For me it is, alas, merely a dream. But, for you, it's a reality!

Anonymous said...

Don't bugger it up Victor. Bowalley road needs Brendo.

Victor said...

Of course we need Brendan.