Wednesday 17 March 2021

Playing By The New Rules Of The Game.

The Auckland That Never Was: Preliminary architectural drawing, commissioned by Ministry of Works planners in 1946 for its proposed Tamaki Housing Area. The National Party's political survival in the twenty-first century may depend upon its willingness to not only adopt Labour's policies - but anticipate them.

, the National Party is going to realise that the rules of the game have changed. If the party’s history is any guide, such a realisation is likely to come later rather than sooner. That same history, however, suggests that National will get there in the end – and that, when it does, its lease on government is likely to be a long one.

The global rule-change, economically and politically, was precipitated by the Global Financial Crisis (GFC) of 2008-2009. Prior to the near collapse of the world’s financial system, the accepted wisdom was unequivocal that “market forces” were the best regulators of globalised capitalism. Better, certainly, than politicians and bureaucrats. As the GFC unfolded, however, it soon became clear that if the resolution of the crisis was left to “market forces”, then the global economic system would grind to a catastrophic halt – setting-off a second Great Depression.

Newsweek magazine celebrated the dramatic re-entry of the nation-state into the political-economic drama with a cover proclaiming: “We Are All Socialists Now”. This was very far from wry journalistic hyperbole. Not when the new US President, Barack Obama, had just nationalised General Motors. Banks, investment houses, insurance companies and automobile manufacturers, had all been designated (to employ the catch-phrase of the hour) “too big to fail”.

The rule-book had been re-written.

The problem was that acknowledging the eclipse of free-market capitalism was very difficult to do, without resurrecting all the social-democratic and socialist nostrums the free-market revolutionaries of the 1980s had worked so hard to extirpate. The upshot was that practically all of the economic dogmas discredited by the GFC continued to enjoy a kind of bizarre post-apocalyptic afterlife. Neoliberals had become the walking-dead; dull-eyed transmitters of “zombie economics”.

And then the Covid-19 Pandemic struck.

Now it was entire national economies that were being designated as too big to fail. If Keynesianism’s first appearance in history had been in response to the multiple tragedies of the 1930s; it second appearance has taken on the qualities of farce.

The US Congress has just passed a “rescue package” of $US1.9 trillion. Yes, that’s right “trillion” – twelve zeroes! And this latest money-gusher is only the latest in a succession of equally gigantic monetary geysers.

Government spending hasn’t so much spun out-of-control as it has taken on the quality of an out-of-body experience. The United States, and the rest of the big capitalist players, hover above themselves in the economic operating theatre, looking down at the pale, prone, patient on the operating table and wondering, with curious detachment, if they’re going to make it.

In this political-economic environment, allegiance to the old rulebook simply makes no sense. When the central banks of the major capitalist economies have more-or-less agreed to keep the global system functioning by taking in each other’s financial washing, a political party like National has absolutely nothing to gain by clinging-on for dear life to the moribund principles of fiscal rectitude.

If money really is no object, then the only sensible political strategy to adopt is the one which best fulfils the electorate’s most urgent needs. Such a strategy makes even more sense in the face of a government seemingly enslaved to the “zombie economics” of its neoliberal advisers. Labour is currently relying on men and women who do not appear to have had an alive-and-kicking idea since July 1984. The only thing that makes the Government’s behaviour look even slightly rational, is that National is, itself, beholden to the same zombies.

Why is there no one in the senior ranks of either of the two major parties with the cut-through intelligence of the young, conservative political commentator, Liam Hehir. He, at least, “gets” that the current housing crisis cannot be solved by tightening-up LVRs, further weaponising the “bright line test”, or, God save us, introducing a Capital Gains Tax. Such “marginal” measures are not for him. Responding to Jack Tame’s questions on TVNZ’s current affairs show, Q+A, Hehir ruthlessly dismissed the “Lost Generation” of aspiring home-owners as being beyond effective help. Better, he argued, to engage in a root-and-branch reform of New Zealand’s tenancy laws. What works so well in Western Europe and the Nordic countries, must be made to work here.

He’s right, of course. To house, within a politically acceptable time-frame, the tens-of-thousands of New Zealanders in need of well-designed, well-constructed, affordable and securely held accommodation, the Government and the private sector have to build apartment blocks – lots of apartment blocks. Not the “vertical slums” of the 1960s and 70s, but the progressively conceived and architecturally impressive projects presented to the First Labour Government in the late-1940s.

These plans, discovered over ten years ago by Dr Chris Harris (in the form of appendices to the 1946 Hansard) constituted the foundation of an Auckland that never was. As tragic as it is uncanny, this comprehensive effort by leading Ministry of Works planners, addressed nearly all of the problems which came to bedevil Auckland over succeeding decades. Everything from cycle-ways to light-rail; ring-roads to intensive public housing: all are there in those state-developed plans which National, beholden to property developers, roading contractors and the automobile lobby, could not abandon fast enough following its 1949 election victory.

Therein lies the true tragedy. After 14 years in power (six of which were years of war) the Labour team of 1949 was old and tired. Their failure to grasp the possibilities of the plans placed before them is, if viewed in a generous spirit, forgivable. Much harder to forgive, however, is a government peopled with young, idealistic and highly-educated politicians, well set up for their second term with a solid parliamentary majority.

Suitably updated, those radically social-democratic plans from the late-1940s could, with just a little political imagination, form the basis of a comprehensive response to New Zealand’s steadily worsening housing crisis. Of course Jacinda Ardern’s and Grant Robertson’s bureaucratic advisers are going to tell them that nothing like the old MoW’s plan is any longer desirable or doable – before eating what’s left of their brains.

It would be strangely fitting if National – albeit eight decades too late – embraced the MoW’s urban development blueprint. After all, it took them more than a decade to grasp the fact that the rules of the game – as understood in the 1920s – had changed. It was only when the party pledged to keep in place the core of Labour’s social reforms, that National became a viable electoral proposition. Its political survival in the twenty-first century could just as easily depend upon National not only adopting Labour’s policies – but anticipating them.

This essay was originally posted on the website on Monday, 15 March 2021.


AB said...

"Hehir ruthlessly dismissed the “Lost Generation” of aspiring home-owners as being beyond effective help. Better, he argued, to engage in a root-and-branch reform of New Zealand’s tenancy laws."

Chris - you can be sure that Hehir's vision still sees those those rental properties being owned privately - and by people from his social class - thus allowing one sector of society to accumulate income-generating capital assets by extracting wealth from another sector who are therefore unable to accumulate income-generating assets. A recipe for widening inequality forever. Hehir's vision is nothing like the 1946 plans which involved state-owned rentals - in fact Hehir is really just wanting to use a similar physical infrastructure to achieve completely the opposite economic and social outcome. Don't give him too much credit.

Kat said...

Labour needs to hurry up then. All ideas on how to quickly convince the current govt to reinstate a 21st Century MoW, sooner than later, welcome.

Chris Trotter said...

To: AB

Those are bold claims to make about a person who you, presumably, do not know.

People can often surprise you, AB - e.g. left-wingers who no longer believe in free speech; right-wingers who accept the need for public housing and secure tenancies.

AB said...

Chris - yes I'm speculating about Hehir and my language should have more clearly showed that. I would be delighted to be surprised by what he is saying, but am not holding my breath for that moment.

Additionally, any 'left-winger' who doesn't believe in free speech, I would regard as a regressive authoritarian, and by definition not left-wing. However, raising good faith arguments about where boundaries should be drawn doesn't qualify as 'not believing' in something.
Conversely, any left winger who doesn't realise that the question of 'free speech' is inseparably bound up with questions of who has power and who doesn't, has lost their way. You can't discuss the issue without enquiring as to who has a platform and the power to use speech to influence real-world outcomes, and who doesn't, and why. When speech becomes power, is it still merely speech? For speech to be truly free, it has to be relatively equally distributed.

Guerilla Surgeon said...

Hehir has a point, but it's the lesser of two evils. If we can't have houses, perhaps we could have renter protection laws as they do in Germany where a larger proportion of the population rent. But it would be better to bring homeownership back up to the level it was in the 1960s and 70s. Before the market went totally mad. This is simply market failure, something conservatives don't like to talk about.

Unknown said...

Chris you mention the 1940s. In the 19402 - post 1948 - Israel had to house 2 MILLION people - and did - with block after block of apartments which it GAVE FREE to immigrant families on condition that they lived in them for - from memory - five years and cared for them to the satisfaction of their neighbours! Yes of course they used money borrowed and invented - but they got the houses. I am not just talking about new territories (the whole state was new territory!) but everywhere an apartment could fit it was built. Two or thee housing designs - and everyone became a mirocosm of the people and the country they had left - so all different inside. I know this because I lived in Israel not that long afterwards. Anyway suspending political judgement of the present state - if a socialist state under pressure (!) wants to house its people it can. It has! We have in the psat also (Israel most impressed by the exampley our welfare state at the beginning of its own history!) Housing our people in the next two or three years IS possible - we just have t' want to do it. It's a matter of national will!

Jens Meder said...

Just another attempt to stimulate thinking and discussion about some (arguable) socio-economic and political realities to help as guidelines for a more constructive and promising future:
1.- Is not private enterprise capitalism more democratic than state monopoly capitalism, because of the wider spread of economic power and responsibilities through capital (wealth) ownership ?
2. - While the free market undoubtedly(?) is most effective for revealing supply and demand relationships, does not its excessively liberal/libertarian application inevitably lead to intensified socio-economic polarization into Haves and Have-nots, and thereby corrupting the ideal of a property owning Democracy into Plutocracy ?
3. Therefore, is it not in the interest of all owners of wealth (modest and substantial) to reverse this trend into widening private wealth ownership to achieve at least a minimally meaningful level (or more) of personal wealth ownership by all citizens eventually, so as to prevent plutocracy being changed into totalitarian state monopoly capitalism by revolution or even a democratic vote, if the Have-Nots become a majority ?
4. Has not Labour initiated widening and increasing NZ (personal and national) wealth ownership potential systematically through the NZ Super Fund and KiwiSaving already ?
5. Could not National - if abandoning its liberalism on this fundamentally critical matter - become a constructively positive competitor (or practical partner in principle) with Labour with this ?

greywarbler said...

Democracy (1) is a name for a system where people have a say in who sets the laws and the administration of the country. Democratic then is a general term for judging the nature of the organised system and parts under scrutiny. There are different ways of arriving at a judgment. One is whether the people find that the advantages and earnings of the nation's enterprises are distributed throughout the nation, usually on a basis of providing for needs and assisting with education and skill acquisition.

On the free market (2) cynics would say that it is most effective for seeking advantage in developing interests and needs of the people, and often helping to create them. Business is an active player in helping form the demand and supply relationships.

As far as (3) is concerned, the old levels of wealth and social mobility are impossible to recreate in any way because of the effects of climate change and the erratic conditions allowed to balloon of the free market eg people putting their nest-egg of retirement cash into an apartment that is blighted by the problematic fungi in the walls, or the lordly way of some body corporates acting according to the law that is slanted against individual owners. The fluidity of low control, high profit-seeking companies helps to strip people of their wealth which can never be recovered. An earthquake or flood can be additional or the initial cause.

Going past 4 and 5; Government getting going with disaster relief programs in NZ, giving as much autonomy to working people to choose an option in a government plan designed to assist young or struggling people to achieve autonomy and a low-cost lifestyle where in between gigs and contracts they share space with a group of their choice of young personal entrepreneurs, is one approach. The wealthy can get on with their lifestyles, but all will have to pay some tax based on 15% of their real or notional earnings, plus all will pay 10% GST (to have a less swingeing impost). There will have to be a two-layer economy, one for those who got out of the Tardis last century and now just go through the motions of living, and the others looking clearly at the here and now and extending a hand to each other, through groups that are mini-families and cheerleaders to each other, which can also tie into parental interactions where possible. And retired people might like to become anchors in groups where there is mutual friendship and respect, so there is a permanence of stability and home comfort that reflects their maturity, kindness and respect for themselves and the others of the group. Not a commune, but a group of friends making their way in the world with a core place, a home to return to at the end of their work. (Sort of an echo of Robert Burns' Requiem; This be the verse you grave for me: Here he lies where he longed to be; Home is the sailor, home from sea, And the hunter home from the hill.)

It's already happening but needs to be embraced by thoughtful young people who can think alike and make their own guidelines to suit the group's chosen style of living. (I became part of a group looking to form a co-housing village and was surprised to find how many had ideas that were incompatible with their expressed beliefs, as I saw them, and vice versa.)

greywarbler said...

Further to my earlier thoughts I liked this from an obituary in Stuff (I enjoy reading about these people - aren't we all amazing). The person was Dutch working for Phillips and thought up the small cassette recorder which was ground-breaking for music etc. and also he brought forward CDs. His name was Lou Ottens and he was not only a clever chap but sounds like a well-balanced one with good EQ.

The last paragraph: 'Although Ottens is often described as inventing the cassette tape, he insisted he could could take credit only for the idea. "Successful products are created by normal people who just follow their intuition, work hard, make mistakes and work together as a bunch of friends," he said. "I have done nothing special."

I want NZrs to be able to say that about this country. I think it is doable. It would be hard just at the beginning, and then we would get used to it and things would go right more often than the other way. When questioned, we would be surprised, "We have done nothing special." It would have become ingrained, our default position. Wouldn't that be something to achieve!

Perhaps we would reorganise our political world; no career politicians going stale and mouldy say three terms at the most, new ones having done a one semester refresher course in social anthropology, political decision-making and communication including active listening, or a one year expanded course for newbies which included ethics and public service. We'd get a better type of pollie able to 'work together as a bunch of friends', well quite often.

Jens Meder said...

greywarbler, thanks for your interest in commenting on democracy, according to which it seems (I understand) that you prefer the status quo with a higher rate redistribution of incomes and wealth -

while not explicitly advocating the extreme of "to each according to needs, and from each according to ability", to be determined by a govt. monopoly of capitalism - or who else or what other commission or body could be responsible for determining and running it ?

Beyond a certain point, it would eliminate the wealth creative energy of sacrificing and risking for a profit by the private enterprise majority (?) of the population, with people increasingly trying to improve their lot through increasing their needs for support rather than through their own creative efforts for that.

While of course a lot of govt capitalism (on infrastructure) is well justified, why don't you think, greywarbler, that a systematic policy to enroll 100 % of citizenry
towards at least a meaningful minimum of their own wealth ownership creation is a more fair (because of 100% participation in the effort) and effective way of poverty elimination than the status quo of Haves and Have-Nots ?