Hand In Hand: "Rogerpolitics" is the term coined by the New Zealand political scientist, Richard Mulgan, to describe the form of politics required to make sure that Rogernomics “took” in a country which, on the face of it, should have rejected neoliberalism out of hand. Had Rogerpolitics not been so successfully embedded in the key organs of the New Zealand state, then Rogernomics would not have lasted.
“ROGERNOMICS” is political shorthand for the neoliberal
economic policies introduced by Labour’s finance minister, Roger Douglas
between 1984 and 1988. While most New Zealanders have heard of Rogernomics,
nowhere near as many have heard of its inseparable companion, “Rogerpolitics”.
The term was coined by the New Zealand political scientist,
Richard Mulgan, to describe the form of politics required to make sure that Rogernomics
“took” in a country which, on the face of it, should have rejected
neoliberalism out of hand. Had Rogerpolitics not been so successfully embedded
in the key organs of the New Zealand state, then Rogernomics would not have
lasted.
Critical to the success of Rogerpolitics was the widespread
public disillusionment with the style of politics that preceded it. In New
Zealand’s case, the principal target of the public’s hostility was the National
Party Prime Minister, Rob Muldoon, and his highly interventionist economic
policies – “Muldoonism”. An additional factor in the public’s antipathy towards
Muldoon was his facilitation of the extremely divisive Springbok Tour of 1981.
In the eyes of younger New Zealanders, “The Tour” was proof of their elders’ unfitness
to rule. The people referred to by the then prominent political journalist,
Colin James, as the “RSA Generation” had, in the eyes of the “Vietnam
Generation”, been confronted with a straightforward moral test – and they had
failed.
Without Muldoon and Muldoonism; without the Springbok Tour;
the hunger for a new way of managing the economy and running the country would
not have been so acute. The proponents of neoliberalism, or “free market
forces” (as the ideology was more commonly referred to thirty-five years ago)
were pushing against an open door.
It was the same all over the advanced capitalist world. The
interventionist economic policies that had played such a crucial role in
generating the unparalleled prosperity of the post-war period had finally run
up against the buffers of the capitalist system. Every attempt to reduce the
rising levels of unemployment and inflation that were the primary
manifestations of the system’s failure only ended up pushing them higher.
Margaret Thatcher’s Conservative Party captured the growing sense of unease
with its 1979 slogan: “Labour isn’t working.” The following year, in the USA,
the Republican candidate for President, Ronald Reagan, summed-up the popular
mood when he declared: “In this present crisis, government is not the solution
to our problem, government IS the problem.”
In its essence, this is what Rogerpolitics is all about:
getting government out of the way. If politicians, by interfering in the
economy, only made things worse, then the obvious solution is simply to prevent
them from interfering.
Accordingly, the Economic Stabilisation Act, which had since
the Second World War allowed the Cabinet to more-or-less run the New Zealand
economy by decree, was repealed. The Reserve Bank of New Zealand was freed from
political interference. The State Sector Act, by introducing market disciplines
to government departments and agencies, fundamentally reshaped the structure
and purpose of the New Zealand civil service. Whenever possible, state-owned
enterprises were sold into private hands.
At both the national and the local level the effect of these
economic and political reforms was to significantly disempower the country’s
politicians. Regulation, where it couldn’t be avoided altogether, was to be
“light-handed”. The day-to-day running of things was to be left to the market’s
“invisible hand” or, in those places where “free market forces” had yet to make
their presence felt, to the new order’s administrative proxies – the CEOs of
the new government ministries and local government bureaucracies.
With remarkable alacrity, the ideological and practical
political infrastructure required to support the new economic regime was
cemented into place. In the nation’s schools and universities; in it’s publicly
and privately owned news media; in its local and national institutions,
Rogerpolitics became the new orthodoxy. For the next thirty years it would not
only inspire the design of the mechanisms by which political power is
exercised, but also the moral justifications for their use.
Those New Zealanders born after 1984 – New Zealand
neoliberalism’s “Year Zero” – have absorbed the “free market” catechism
practically without thinking.
The market organises human activity much more efficiently and
effectively than the state.
The freer the market, the better the organisation.
Private ownership generates much better outcomes than public ownership.
Capitalism works best when Money, Goods and Labour are all permitted to
move freely around the globe.
Free trade promotes peace, prosperity and global understanding.
Protectionism is an outgrowth of nationalism – both of which are very
bad things.
Trade unions distort the signals of the labour market – which makes
them very bad things also.
Capitalism celebrates individual freedom and embraces human diversity –
racism, sexism and all other forms of discrimination have no place in a
properly functioning capitalist society.
In summary, the only sort of politics which it is ethical
(and advisable) to practice in the New Zealand created by Rogernomics is the
politics which exerts the least influence over the smooth operation of the free
markets it brought into being. Rogerpolitics both asserts and insists that the
best politician any New Zealander can be is the politician whose actions
produce the least effect on the operation of the nation’s economy. The very
worst politician a New Zealander can be is the politician who mobilises the
envy of the many who have failed in the marketplace against the few who have
succeeded.
Rogerpolitics does not believe that democracy is a market
friendly form of government, and all Rogerpoliticians are expected to act
accordingly.
This essay was
originally posted on The Daily Blog
of Thursday, 15 November 2018.
Heard of Rogernomics but never heard of Rogerpolitics
ReplyDeleteIn your normal fantasy world eh. If you look at the actual data you see the NZ economy has done a lot better since 1984 than it did before then.
ReplyDeletehttps://tradingeconomics.com/new-zealand/gdp for example but many other indicators tell the same story.
Unfortunately Anonymous the people haven’t.
ReplyDeleteFor me I understood what the Free Market was all about when it made the Reserve Bank free of political interference. That happened throughout the world. It was and is a direct attack on democracy. It will never matter what the people wish because the whole world is now controlled by a group of faceless bankers. Who knows what political views they hold but that matters little because in reality it is just a group think. believe that the whole thing was organised by the Chicago School of Economics which from the late 1960s was determined to overturn the existing structure. Look what they did in Chile. How many of our so called business leaders of the 1980s had been schooled there. Quite a few actually and they formed a cabal here to influence others. This happened through out the world. You may say that it is just a conspiracy theory but because it happened through out the world, proves, in my view it was a fact.
Free market economics remind me of Tim Shadbolts concrete mixer, named Karl Marx because it worked better in theory than reality.
ReplyDeleteThe largest fallacy of free market efficiency is that the inevitable aggregation of capital, despite all theories to the contrary occurs. Intervention is the only proven remedy.
https://tradingeconomics.com/new-zealand/gdp
ReplyDeleteMain problem with that is that GDP is a piss poor way of expressing the relative prosperity of the country.That's why I'd sooner live in almost any reasonable sized European city than almost any reasonable sized city in the US, in spite of the fact that the US GDP is much higher.
Off topic I know, but – we could do with more journalists like this.
ReplyDeletehttps://www.themarysue.com/upfront-interview-trump-rep/?utm_source=quora&utm_medium=referral
The defenders of the socio-economic status quo lost the argument in the early and mid-1980's. They lost in terms of observable results, where it was obvious to anybody travelling overseas that NZ was slowly falling behind in wealth - something reflected in the nation's steady slide down the GDP/capita ranks from the early 1950's.
ReplyDeleteAs a result, Rogernomics did not actually have to make any arguments at all - although it did. The old order had simply run out of arguments.
The problem with this thread, aside from being yet another hand-wringing wail of despair about battles lost more than thirty years ago, is that there is nothing here that makes the long-awaited counter-argument. Fantasies of re-nationalising various businesses and even whole industries do not count as arguments.
But lets face it: Rogernomics was able to leverage off arguments, ideas and actions that had been happening in the UK and USA for several years. What foreign examples does the NZ Left have to use? Corbyn and Sanders, with their similar combination of nostalgia for a world destroyed by "neo-liberalism" and a wishlist of vast government actions and interventions, fueled by massive tax increases and further borrowing?
No. You want to over throw the current status quo, you're going to have to do a lot better than that.
Forget the economy for the moment.
ReplyDeleteA relatively modest fraction of the population has done well, the rest haven’t.
Forgetting the aggregate economy for the moment. Rogernomics made a modest fraction of the players better off. It was a disaster for many.
ReplyDeleteAnonymous: you need to use real GDP per capita (nominal GDP adjusted for the price level and population growth) when making those sorts of comparisons. I'm not sure you're right about the period immediately following the 1984 reforms.
ReplyDeleteIn my memory Muldoon won an overwhelming victory by doing away with Kirk's super savings scheme and reduced the age of NZ Super entitlement to 60, to be financed "hand-to-mouth" by PAYGO taxaton.
ReplyDeleteThis, + all the increasing welfare and subsidy expectations led to increasing indebtedness which was and still is recognized as impoverishing if mostly for financing consumption and not for wealth creative profitable investment, and the "neo-liberal" invisible hand ruled free market movement recognizes that private capitalism is more efficient by having to survive through its own profitability and thus preventing impoverishment through subsidizing consumption on credit.
But the mistake was made of not making sure that successful salesmanship of liberal consumption (even on credit) cannot lead to widening poverty of those totally falling for it.
The latter can be prevented through a universal personal (retirement) wealth creative savings rate component built into the taxation system, i.e. by a non-free-market-liberal compulsory savings rate.
You've been magnificent lately in the causes of demo-cracy and climate-change. Furious.
ReplyDeleteAll we have is our truth. To enter the no man's land of others hearing of us is somersaults and forward rolls -- short term guesses paid for in the long term.
I realise that includes the lower half of our age groups. Much area for Anti-democrats to make mischief.
"In summary, the only sort of politics which it is ethical (and advisable) to practice in the New Zealand created by Rogernomics is the politics which exerts the least influence over the smooth operation of the free markets it brought into being. Rogerpolitics both asserts and insists that the best politician any New Zealander can be is the politician whose actions produce the least effect on the operation of the nation’s economy."
ReplyDeleteToday it is the free-to-air broadcasting system that is under threat. The old debate between supporters of the purely commmercial television and radio networks of the rogerpoliticians and public broadcasters is over. We are now entering the final stage of privatisation as the children of the rogerpoliticians (Clare Curran and Kris Faafoi) preside over the transfer of taxpayer funding, without debate, from public broadcasters to "public media" which include foreign-owned news organisations like NZME and Stuff.
Was that a pun NickJ - aggregate, connected to concrete and capital! Getting concrete fit for purpose indeed requires the right mixture of aggregate and other matter. Then it will last for aeons.
ReplyDeleteUnfortunately the free market wants to rip everything up every few years, and build something bigger and very profitable requiring some of your resources, and all that has been established must be disrupted. Then they sell you a minor replacement that costs half of the original entity, and call that efficiency. And that has to be replaced in a few years and that is called effectiveness; (by the marketeers who never call you anything but 'sir' or 'ma'am' or consumer, while you are paying up, but in their minds they think of you as 'sucker'.)
Thing is Chris, Muldoon and "Muldoonism" were 'merely' the natural conclusion of the government running the economy.
ReplyDeleteI don't see how you can both want the govt to make continual major interventions in the economy, and decry Muldoonism. They are the same thing.
Put if this way; if Muldoon had been 'nicer' and not so (it is supposed) cynical over the cause celeb de jure of the Springboks, would you hate him, or revere him? Because otherwise, he was pretty damn leftist, despite his party. (I don't believe this is a particularly original observation).
Perhaps you would like such a 'Nice Muldoon', I believe you have said complementary things about Holyoake. Which he probably deserves :)
But politics are driven by 'events, dear boy', trivial or structural. And for NZ the structural changes of the 70s were the UK joining the EEC, and the Oil Shock(s), which left NZ without a guaranteed market for its products, and greatly increased costs.
All of a sudden, we couldn't support either the union featherbedding, or the farmers' guaranteed minimum income.
THIS is what lead to "neoliberalism", - something had to change, and "neoliberalism" looked to many to be the best choice - was anyone selling anything better?
Earlier in the year I read Naomi Klein's 'The Shock Doctrine'.
ReplyDeleteThe book shows in detail how these neo-liberal maniacs operate.
Recommended reading.
"NZ was slowly falling behind in wealth"
ReplyDeleteAnd it continued to fall under Roger Norma's. In fact it fell faster I think. And now New Zealand's GDP growth is about 81st in the world. Not that GDP is necessarily a brilliant indicator of a country's health. It's just a measure of production, and that equally counts producing kiwifruit and building prisons.
Tom Hunter
ReplyDeleteThe defenders of the socio-economic status quo lost the argument in the early and mid-1980's. They lost in terms of observable results, where it was obvious to anybody travelling overseas that NZ was slowly falling behind in wealth - something reflected in the nation's steady slide down the GDP/capita ranks from the early 1950's.
That's an important point you make about NZ falling behind as observed by anyone travelling overseas. We did manage to build up our nation's economy to the extent that people could travel. It was rocky getting there, but we worked at it. After the Great Depression was brought about by that depressing lot of financial finaglers overseas, then WW2 to pierce the boil grown out of WW1 aftermath, we had a boost because of a wool demand connected to Korean War.* And there were other short term boosts as people moved on from war depression, and looked to enjoy better times.
These were time and worldwide contextual matters, not examples of an enduring new dawn. When this sudden lotto win of favourable events and prosperity evaporated, those who had profited were loath to let go. The wealthy wanted to remain so as the economy slumped again, as in colonial rocky days. They were prepared to gamble on a gambit so they would continue to be accepted at the tables of the high class overseas.
They threw the people aside as pawns, adopting a national version of the business method of borrowing high to buy a working asset, then strip it of saleable items, reduce working staff, and continue to push brand and product priced high. The profit increases because of lower cost of production and labour, and gains from capital sales, which pays off the purchase loan. Through this asset-stripping, a business is gained with little outlay and large borrowings and its profit pays off the balance; the business paid for itself. Gradually it declines but by then the profit-takers had their money. That is NZ Ltd. at the present, still being asset-stripped, in house sales for instance, and suffering from labour mismanagement and working-poor wages, profit-taking and tax avoidance and evasion, and continuing decline.
*in 1950 New Zealand was the world's third-largest wool producer, and the economy boomed as the United States' demand for wool soared. The US was stockpiling the wool in case the Korean War escalated.
Te Ara Encyclopedia of NZ
And it continued to fall under Roger Norma's. In fact it fell faster I think.
ReplyDeleteAs usual you think wrong. As this Post from Brian Easton shows, New Zealand suffered an incredible drop in GDP (PPP) per capita ranking over 33 years, from 5th place in 1950 to 19th in 1983 in the OECD.
That had real impact as we were increasingly outbid for human and other resources: it's why hundreds of thousands of Kiwis departed these shores forever.
But in the next 34 years since the dreaded arrival of Rogernomics and "neoliberal economics", we've stablised at 20th. That's not a failure in comparison to the desired economy of The Golden Weather that you, Chris Trotter and other nostalgic old Lefties constantly want us to return to. The OECD data above indicates that the economic policies we were following in those years – defiantly Keynesian, statist and non-neoliberal – saw us decline farther and faster than we have since the mid 1980’s.
You can certainly point out that Rogernomics did not do much to increase our productivity growth, which is the key to a growing economy. As a result we've only been able to tread water rather moving back up the scale. Moreover, unless our productivity problem is fixed we will be outpaced by not just OECD but Developing countries: by 2030 we won't be able to outbid India and China for doctors and nurses.
But returning to the economics of NZ circa 1950-80 won't increase productivity and will simply dump back on us the shackles and burdens that dragged us down all those years.
As usual you think wrong.
ReplyDelete"Whichever explanation is correct, the first two falls can be unequivocally attributed to external shocks over which New Zealand had little influence. (That the falls were the result of external shocks, makes the arguments of the early 1980s that New Zealand’s relative decline could be corrected by the reforms of the late 1980s all the more absurd, especially as the advocates were paying so little attention the actuality of the New Zealand economy they failed to notice the external shocks.)
The other big fall occurred in the late 1980s and early 1990s. There was no significant external shock. Rather, the decline seems to have been caused by the poor performance of the export and importing sectors due to an overvalued exchange rate, especially while public support for this ‘tradeable sector’ was stripped out.
It seems likely that had there been no reforms – or to be more precise, had the reforms been akin to those implemented in Australia: more practical and less ideological – New Zealand would still be at the OECD average."
And as usual you didn't read the whole thing
Tom Hunter: The subject of this article is primarily politics, not economics, and as to your dismissal of "nostalgic old lefties", there are a few things that need to be retrieved from the past if meaningful political change is to become possible. One is a conception of the public good, for which market efficiency is not an effective stand-in. Another is the capacity for a government to act primarily on behalf of the people whose votes they seek, and Corbyn's re-nationalisation plans would strengthen the government's hand in that regard. This is important, because a robust conception of the public good should not be constrained to making demands only on the economically powerless. Another is genuine working class representation (or once-were-working class representation if you do not want to go back to the 70's). The roughly 30% who no longer matter under Rogerpolitics, and who must pay GST to survive, have every right to take up the cry "No taxation without representation."
ReplyDeleteBut in the next 34 years since the dreaded arrival of Rogernomics and "neoliberal economics", we've stablised at 20th. Tom Hunter.
ReplyDeleteThat can be interpreted to mean that we had fallen down to on or near our realistic level of GDP after the season of plenty. Now we balance in the financial netherworld inviting finaglers who have learned the mendacious ways of hard finance to come back here and have a fling as PM. And play us like the lead in a jazz band. While the economy swooped around in unaccustomed ways we watched the entertainment scene.
Our situation had probably already got to near the tipping point of the Peter Principle. Within the world hierarchy we had risen and gone OTT.
There was a sea change and away down we went, alarming but we could still float. But we were salvaged by financiers using the Treasury to work on vulnerable turncoats in Labour who were either innocents or mendacious, and Treasury made use of the period of uncertainty to let in the pirates as we trembled after reaching so high.
The Peter Principle is an observation that the tendency in most organizational hierarchies, such as that of a corporation, is for every employee to rise in the hierarchy through promotion until they reach the levels of their respective incompetence.
https://www.investopedia.com/terms/p/peter-principle.asp
We always let ourselves get ripped off in NZ. If we develop or do anything special, we sell it or compromise it for immediate gratification instead of holding it to our bosoms and getting the good returns ourselves.
((Here is a cautionary tale of how you have to be quick to keep up with money-hungry and focussed people who organise themselves to rip you off.)
The Rena wreck salvage company were robbed of much of their specialised equipment loaded on board their ship as they left Singapore for Tauranga.
https://www.odt.co.nz/news/national/pirates-stealing-rena-salvage-gear
And as usual you didn't read the whole thing
ReplyDeleteHa! I knew you'd mis-read it. And as it happens I did read the whole thing.
I chose Easton so that I would not have to hear the usual moaning from you about RWNJ sources or some such rubbish. But in doing so I was well aware that he would be making arguments/excuses for the failure of the pre-Rogernomics NZ economy, just as you do. He even devotes a whole section to dismissing rankings so he can focus on another stat that he figures he can use to show that reforms were not needed.
He concentrates on the relativity of GDP/capita growth rate between NZ and the other OECD nations, which then allows him to make the statements he does, blaming the decline in that relativity measure on three sets of shocks; external falls in wool prices in the late 60's, the oil shock of the mid-70's, and internal problems with exports in the late 80's/early 90's.
But as he acknowledges, we were already behind in our growth rates through that pre-Rogernomics era - hence the constant slippage in our ranking. Apparently having that growth-rate gap remain "relatively" constant is ok with him, and of course we never made up each of the big declines, we just stayed permanently further behind after each one.
And he either misses or deliberately ignores one of the main Rogernomics arguments when he says:
....the advocates were paying so little attention the actuality of the New Zealand economy they failed to notice the external shocks.
On the contrary, one of the big points they made - and Easton's own arguments acknowledge this implicitly - was precisely that the old economy did not cope with external shocks at all well. Anybody who remembers carless days and Muldoon's clampdown after the 1967 woolprice shock would understand this: those are classic examples of a rigidly government controlled economy failing to cope and resorting to even more prescriptive controls. It never works.
The reality is that NZ has coped much better with the recessions since then - 2000-2001 and 2008-09 - than the pre-Rogernomics economy coped with recessions in the 60's, 70's and 80's.
The fact remains that our OECD GDP/capita ranking slipped far more from 1950-1983, than they have from 1984-to today and unlike GDP/capita ratios, that steady decline in our relative prosperity was obvious to any Kiwi who went overseas and felt the pain of ever-less valuable currency.
And since you're into "close reading" I would also point out two other statements from Easton's article:
The message that the New Zealand has been in long term economic decline in the post-war period is a dangerously misleading one.
[his book] identified a set of explanations for the long term decline of the New Zealand economy
He does not deny that there was a "long-term decline, he jst thinks it's "misleading" in the hands of the reformers. He offers reasons for the decline, but never asks why the old economy failed to fix those problems. That's surely a key point if he, like you and Chris, want to re-wind the clock to the world of the Department of Electricity, Department of Railways, MOW, the Post Office and so forth.
I don't think anybody would deny that there were things that could have been done better with the economic reforms of the 1980's, but that argument in the hands of old Lefties like you, simply becomes an excuse for making no real fundamental changes to the old system, except for more socialism - and for this constant nostalgia that things would be great if only returned to that world.
Basically Muldoonism in a nutshell, which is ironic.
Oh Tom Hunter how great that you know how we could manage our economy and presumably have balance so there are opportunities for all. So do tell! It would be good to not have this horrible growing precariat which is creeping in, though the majority haven't noticed it yet; the screaming hasn't started..
ReplyDeleteYou seem to indicate that there was/is a way. But you say there were in earlier years, no real fundamental changes in bold type. Strange, I have noticed great changes that have wiped out our previous supportive societal attitudes;I regard that as fundamental. What exactly do you have in mind that we should be doing?
We have turned to prostituting ourselves to anyone who will give us a bob and we are not even holding out for a job. That's a fundamental change. We used to worry about Winebox Enquiries, now we just settle matters over a nice drop like civilised persons, though not Chardonnay, that's for the Socialists.
Tom Hunter.
ReplyDeleteYou may have read it all the way through but you seem to have missed the main point. The first two shocks were nothing to do with New Zealand policy. Even Muldoon's policy, and it's funny how Muldoon – as a populist conservative – has come to represent a stick to beat the left with but there you go. The last crisis he mentions was caused directly by "free-market" policies. As was the 2008 crisis if my memory serves. So according to you we can have policies that don't provoke economic crises but don't cope very well with them, or policies that you say cope very well with economic crises but seem to provoke them. That would seem to be Hobson's choice. Particularly as I think economists are mostly agree that in the 2008 crisis Obama did well to mitigate it – although not well enough because he didn't go far enough – by some sort of Keynesian spending. And certainly nobody could deny that things could have been done better – particularly as Ireland and Australia both came through their reforms in much better condition than we did, albeit with advantages we didn't have. Not sure where you get the idea I want to return to Muldoonism. But I actually want is a fair bit more regulation about workers rights for a start. Not quite sure how that fits into your idea of "socialism". My son for instance works shitty shifts which leave him basically fucked, because they don't give them enough time to recover when he changes – yet he gets no extra compensation for this. It's about time we stopped accepting this bullshit about "we can't afford it" when it comes to decent conditions for workers. After all, your mate Roger Douglas promised us a high skill high wage economy. Where is that by the way? Seems to be in the same basket as the flying car.
However, NZ entrepreneur has developed something that has practical uses on earth - an amphibious car or larger vehicle. This should be being made in NZ as part of our upskilling and entering the 20th century program away from agriculture dependency, and hackable software apps dependency.
ReplyDelete'This 4WD HSA demonstrates that the technology is adaptable for a whole range of applications. It took us 8 years, a million man-hours and tens of millions of pounds to develop HSA technology. With this latest vehicle, I'm sure that the technology's potential is clear for all to see.', comments Alan Gibbs, Chairman of Gibbs Technologies.
On land the Humdinga can accelerate from 0-60 in 9.2 seconds and on water can reach the 'plane' in less than 10 seconds. It has a curb weight of 2000kg, has all wheel independent air suspension and runs on regular unleaded petrol. The vehicle is 5400mm in length, 1850mm in height and 2000mm in width.
https://www.conceptcarz.com/vehicle/z11628/gibbs-humdinga.aspx
We could sell them to the UN and other disaster and aid agencies. Some of the money spent on armaments could go to buying this useful resource.
The use of technology practically available in the short term would help with areas of devastation, isolation, starvation and wilful ignorance that dogs our moves in going to other countries' aid. At present they are probably mostly built for the 'bolthole cabal'. (I await a curtly worded denial of this with factual information to the contrary.)
Splendid, 60-year-old.
ReplyDeleteSpeaking muscular reality at your age is unusual -- you've seen all the regular old foot-noters in your letters columns.
If you need money, ask. I have the remnants of my parents, grandparents and great grandparents in my pocket. It was always about the transfer of wealth from one generation to the next. National mental-cases.
If many are deaf, doesn't matter, if you speak right.