Ground Zero: It was the Treasury which planned, and in large measure led, the neoliberal revolution in New Zealand. In 1984, its official “briefing paper” to the incoming Labour Government – presented in book form and entitled Economic Management – became the Finance Minister’s, Roger Douglas’s, “Little Beige Book”. Step-by-step it led the new government down the most radical path of deregulation, privatisation and marketisation yet attempted in a western democracy.
JACINDA ARDERN had the Director-General of Health, Dr Ashley Bloomfield, to stand alongside her in the Beehive Theatrette. Who should Grant Robertson stand alongside? The Finance Minister tells us he is talking with Treasury’s top people. Together, he assures us, they are charting a course out of the unfolding Covid-19 Recession. In effect, Robertson is inviting us to trust Treasury. If economics were a real science, like microbiology, then trusting Treasury would be a reasonable option. But economics isn’t a science. In fact, it’s not even close.
Treasury could send out it’s top person, Chief Executive and Secretary Caralee McLiesh, to stand alongside the Finance Minister, but unless she possesses presentation skills so far undisplayed in her short career at the top of New Zealand’s most powerful government department, it just wouldn’t be the same.
That’s because it was the Treasury which planned, and in large measure led, the neoliberal revolution in New Zealand. In 1984, its official “briefing paper” to the incoming Labour Government – presented in book form and entitled “Economic Management” – became the Finance Minister’s, Roger Douglas’s, “Little Beige Book”. Step-by-step it led the new government down the most radical path of deregulation, privatisation and marketisation yet attempted in a western democracy. Three years later, a second volume, ominously entitled “Government Management”, instructed Labour and National in how to finish the job.
Nothing released by the NZ Treasury in the last 36 years has indicated that it has deviated in any significant way from the ideological position it staked-out so boldly in the early 1980s. That no government elected in the last 36 years has felt confident enough to defy Treasury advice (at least, not in any meaningful way) merely confirms how enduring its ideological and organisational victories have been.
If the Finance Minister invites Ms McLiesh to stand at the other podium on the Beehive Theatrette stage it will tell us at least two things: 1) That the co-ordinates to economic recovery have been set using a neoliberal compass. 2) That the Finance Minister is happy to steer by Treasury’s stars.
New Zealanders are confident that the advice of their Director-General of Health, grounded solidly in medical science, is sound. We can trust Ashley. But, unless there’s been another revolution in the upper echelons of Treasury, its advice will continue to be grounded in the demonstrably unsound neoliberal ideology. That being the case, Caralee can be trusted to prescribe exactly the same medicine New Zealanders have been forced to swallow since 1984. Moreover, if Grant is standing there alongside her in the Beehive theatrette, nodding sombrely as she speaks, then he can be trusted absolutely to administer it.
It is only fair to acknowledge at this point that the Finance Minister isn’t exactly spoiled for choice when it comes to alternative ways out of the economic disaster inflicted upon us by the Covid-19 virus. So crushing were Treasury’s victories of the 1980s and 90s that until very recently the opponents of neoliberalism have lacked the intellectual confidence to advance anything approaching a credible alternative to the economic status quo.
Where, we may ask, is the comprehensive recovery plan submitted to the Finance Minister by the Council of Trade Unions? Where is the progressive equivalent of the plethora of books penned by the disciples of Milton Friedman and Friedrich Hayek in the 1970s and 80s? If the French economist/historian Thomas Piketty is supposed to be the twenty-first century’s answer to that great prophet of managed capitalism, John Maynard Keynes, then the Left has been sold a very soggy croissant.
Once again, being fair to Grant Robertson, it was Labour’s “Future of Work” exercise – over which he presided in the run-up to the 2017 General Election – that equipped the Finance Minister with such heterodox ideas as he has been willing to draw on in responding to the Covid-19 Crisis.
Rather than attempt to replicate the Prime-Minister’s highly effective daily briefings with Dr Bloomfield, perhaps it would be wiser for the Finance Minister to draw upon his Future of Work’s consultative precedent. Would it not constitute an “essential service” to New Zealand’s economic wellbeing to convene (with appropriate social-distancing) a conference embracing all the significant sectors of our society: bosses, workers, farmers, bankers, bureaucrats, professors, students, artists, beneficiaries, priests and non-profiteers; to collectively chart an equitable course to national recovery?
This essay was originally published in The Otago Daily Times and The Greymouth Star of Friday, 1 May 2020.