Saturday 30 March 2024

National’s Governing For (Crony) Capitalists – Not Capitalism.

Gimme, Gimme, Gimme! The late Bruce Jesson used to say that while National governed for capitalists, Labour governed for Capitalism. Jesson’s suggestion: that National was so firmly locked inside the individualist logic of the private sector that it struggled to see the broader capitalist picture; was a shrewd one.

WHY IS THE NATIONAL PARTY doing so much for landlords, property developers, trucking, and construction companies, and so little for everybody who isn’t already pretty well-off? It’s as if protecting landlords’ investments and building apartments and roads now constitute the whole of National’s policy objectives. Even their most faithful supporters in the farming community are being neglected by National’s present crop of leaders. What has happened to the National Party?

The late Bruce Jesson used to say that while National governed for capitalists, Labour governed for Capitalism. Jesson’s suggestion: that National was so firmly locked inside the individualist logic of the private sector that it struggled to see the broader capitalist picture; was a shrewd one. Certainly, no politician with even the most rudimentary grasp of the public interest would consider doing today what made National Cabinet Ministers of the past so notorious: ensuring that the gravel roads leading to their farms (so many of them in those far-off days were farmers) received a generous topping of bitumen.

But, how different, really, is seeing nothing wrong with sealing a seemingly random collection of rural roads at the public’s expense, from accepting a $1,000 per week government allowance for inhabiting a property one already owns, mortgage-free? The first example might have fallen under the heading of ministerial discretion, the second remains a perfectly legal ministerial entitlement. Real effort was – and is – required to bring these “entitled” National Party grandees to a more realistic understanding of their responsibilities.

Christopher Luxon’s problem with his Wellington accommodation allowance reflects his background as a corporate leader and property investor. Such perquisites are taken for granted at the CEO level, and very few, if any, eyebrows arch upwards when they are accepted. Luxon and his ilk float freely in the gravity-free milieu of the privileged. For these types, getting reacquainted with solid ground can be a fraught process.

At least when National was the party of the farmers its leaders’ feet remained firmly rooted in the soil. Drawing one’s wealth from lamb-sales, wool-clips, and cow’s milk is very different from watching property and share prices surge. Farmers are intimately connected to the real world. The best one can say about money is that it is a representation of the real world. Which isn’t the same thing – not at all.

So who are these capitalists on whose behalf National is governing the country? Predominantly, they are the capitalists involved in building houses, apartment buildings, and all the ancillary infrastructure that goes with property development. Not far behind them are the capitalists who use and build New Zealand’s roads – the trucking companies and the big civil-engineering firms.

What little understanding of Capitalism’s priorities National does possess is reflected in its support for the extractive industries of mining, oil and gas, forestry, and fishing. The party’s perception of these industries’ importance is sharpened by the quantum of their donations to its campaign funds.

That said, the number of these “crony” capitalists is insufficient to sustain an electoral party. National needs a Party Vote approaching 40 percent to have any hope of governing the country in coalition with the other parties of the Right. (Forty-eight percent if it seeks to govern alone.) But, to achieve these sorts of numbers, National needs to make a plausible pitch for the support of close to half the population.

To forge the necessary synergy between National’s capitalist cronies and its electoral base, its strategists have targeted those older New Zealanders in possession of their own, mortgage-free, homes – along with one or more rental properties. These voters may continue to make their homes in the leafier suburbs of New Zealand (electorally-speaking, National has long been the party of the better-off suburbs) or, they may have joined the burgeoning number of ageing Kiwis living in retirement homes and villages.

A great many of the people living in retirement communities will be cashed-up beneficiaries of the housing boom. As such, they have no interest whatsoever in Adrian Orr lowering the official cash rate. The higher the interest rates, the greater the return on their savings. They have no interest, either, in Wealth or Capital Gains taxes. When the time comes to sell the family business, they have no inclination to cut the Tax Man in on the deal. Certainly, National did not lose any votes by relieving these older landlords of Labour’s pesky tax deductions.

That these older-voters-with-money have children and grandchildren also works to National’s advantage. With more and more young people relying upon the Bank of Mum & Dad for the deposit on their first house, any measure depleting the Bank’s deposits is unlikely to be welcomed. Then there’s the touchy subject of their inheritance. Mum & Dad don’t live forever. These voters-waiting-for-a-legacy are not likely to support any party promising to impose an Inheritance Tax.

Which just leaves those Kiwis who want nothing more than to become the owners of the big mansions that feature on the front pages of the real-estate supplements. The sort of people without whom Lotto would go broke. “Aspirational Voters”, that’s what the political scientists (and the election campaign specialists) call them. The people who are never tempted to swap their avarice for a commitment to social justice – or even for a capitalist system that works! In their eyes, equality makes losers of us all. They may not be winners – yet – but by voting for National they at least get to feel like winners.

It’s just possible that National’s Simeon Brown has cottoned-on to the fact that these aspirational voters – especially the blokes – also feel like winners when they’re tearing down the highway in a gas-guzzling SUV. Nothing shouts “Freedom!” like a fast car. Not something that’s generally observed of busses and trains!

So, that’s National: the party that governs for capitalists – large, small, and aspiring. As proof of their commitment to the avaricious, they have promised, and are absolutely determined to deliver, tax-cuts. To pay for these National is perfectly willing to: defund the Police; keep the NZDF on its knees; run the risk that Foot & Mouth Disease will get past overworked border security staff; downgrade KiwiRail and the inter-island ferry service; pare-back public transport; see another generation of Māori and Pasifika children grow up poor, malnourished and angry, while they stand back and watch the public health and education services – those time-tested ladders out of poverty – fall apart.

It’s not the pathway to a thriving and profitable capitalist society. Capitalism works best when the state encourages it to lift the whole population to a level of comfort and security that makes increased productivity more than a pipedream. Historically-speaking, that’s been Labour’s goal – and achievement. More to the point, when National’s been intelligent enough to follow Labour’s lead, that’s been its achievement, too.

This essay was originally posted on The Democracy Project Substack on Monday, 25 March 2024.


John Hurley said...

So who are these capitalists on whose behalf National is governing the country? Predominantly, they are the capitalists involved in building houses, apartment buildings, and all the ancillary infrastructure that goes with property development. Not far behind them are the capitalists who use and build New Zealand’s roads – the trucking companies and the big civil-engineering firms.
Mention that to Sean Plunket; point out that while rents stay sky high in Queenstown real incomes in tourism and hospitality are falling.

Power is a matter of who can ask; who can say and who can hear.

I had that sense on Kiwiblog and also NZCPR. There is a well heeled landlord demographic who are more than a little sensitive to criticism.
It's as though land gives up gold through it's pores and a child is born or not born in to that land owning class. They were fleet footed but they didn't "['Es] work[ed] for it" [Mr Tiler on Chch man who owns 1000 houses]

LittleKeith said...

I hear what you say, but National, etc, have inherited a housing crisis both of Labour's failure and of its National predecessor.

Labour managed to create a playing field that encourages intensive housing on minimal land but it did not understand the parasite host ecosystem private rentals need to exist and there are just far too few state houses to not have to rely on the private sector for rentals.

The regulations Labour bought in to discourage housing as an investment failed to address the rental shortage which meant more investors were abandoning rentals, and though that may have helped first home buyers, the imploding economy killed off any green shoots in that area.

So problems abound in housing in 2024. There is little spare cash for more state houses, that opportunity sailed under Labour, so the parasite host system must make a comeback to stave off even more problems. Whatever is going on currently, to me, is trying to prop up a system that is teetering on the brink of collapse.

LittleKeith said...

Your penultimate paragraph over simplifies the situation. The previous neo collective Labour government wrecked an already fragile health system. Short of money and staff, the priority was not ICU staffing, or replacing failing infrastructure, oh no, they went on a binge of race policy setting up a twin system for Maori. Education is there, parents just have to ensure their kids turn up. Is that so hard? And I have a lot more faith in Maori and Polynesian people who do not need the magnanimous blood sucking state to ruin their lives.

In my lifetime, I have watched the proliferation of food banks, even when the country was screaming out for workers and economy booming, these places cannot keep up. Similarly, housing people in motels took away the need to manage ones own accommodation and these places breed even more problems than they attempted to solve. Then there's the age old welfare system and it's recipients. The hand up becomes a way of life and its well documented just how this breeds generational dysfunction. And its outcomes are hard to look at. Apparently, only 40% of workers fund the entire tax base without calling on it. It seems the more we imagine how to fix a problem temporarily, the more a certain type of human gets hooked on it, lose their independence, drive and will to live, and the worse it gets.

The whole rotten system is imploding in on itself. We have generational dependence bred by well-meaning hopelessly naive politicians. It cannot carry on, business as usual!

John Hurley said...

Michael Lind in Tablet (A Jewish magazine)

It is these members of the working-class majority, native and naturalized alike, in the U.S. and similar countries in whom contemporary national elites including our own have lost interest. Unlike the rich, there is no reason for national governments to sell them passports in return for private investment or public payments. Unlike desperately poor illegal immigrants, they tend to insist on working for living wages in decent conditions and cannot be used up and sent back to their countries by employers, unlike guest workers (modern indentured servants). Most working-class people price themselves out of the cheap labor market but can’t afford foreign travel, much less citizenship in multiple countries.

For many members of the economic and social elite in the era of globalization, the nation-state—with its shared sense of solidarity and obligation among its citizens—is obsolete. Enlightened progressives and libertarians alike view countries as mere territories—transient labor camps and global investment zones. Citizenship is of no more ethical or emotional significance to the global overclass than a gym membership. For the mostly immobile working-class majorities of all races in all countries, however, their political citizenship is their only claim on the favor of their own national government. The debate about citizenship, then, is not so much one between left and right as it is part of the contemporary class divide within every Western nation, including our own.

John Campbell
What do you want to be remembered for?”
John Key
“Going back to that main point I think it was Muldoon who famously said “I want to leave the country in no worse condition than I found it”.
John Campbell
“Isn’t that a low ambition?”
John Key
“Yes I want to leave the country in better condition than I found it and if theres something (I genuinely beleive) It would be lifting our confidence to a certain degree about how we see our selves in the world and what we think we are capable of achieving. Now I think individually there is masses of ambition that sits out there there but can we actually take that and convert that to take the opportunity .
And I always thought what was happening in the opposition of politics (of course they would oppose National, that’s their job actually apart from everything else) but it was a bit negative about our place in the world. So we played a bit about whether people coming here was a good or bad thing whether people should invest here was a good or bad thing, or whether we have a trade agreement with parts of Asia was a good or bad thing, but actually in my mind, the reason that I want to say yes to those things is because they are the opportunities that reflect our opportunities to both get wealthier (which is all about what you can do with that money) and then ultimately the opportunities for Kiwis. I’d like New Zealanders to feel (after my time as Prime Minister) they have become more confident outward looking nation more multicultural.

... And he formed Stonewood Key (is what he meant by that).

In her speech to the Bologna University Ardern echoed Jim Bolger who was disgusted that people blame migrants because of their own inadequacies.
Ardern said the same:

"why would politicians use such a tool? Because by blaming others you immediately remove the need to find solutions yourself"

Trust isn't listening to Ardern, algorythms and censorship it is a fair fight; hearing both sides

Gary Peters said...

Remember LittleKeith, it may 40% that take little from the State but it is a sliding scale. The real tax burden is being heft by approx 10% and most on the left think they should be paying even more.

Anonymous said...

I agree with most of your blog post because National does look after the capitalists (what they call the productive economy), and no-one loves that. So why did people vote for it?

There is a wider picture which gives better context to the current situation. So much of what National is doing to appeal to a wider electoral base is simply undoing what Labour did. Despite good intentions Labour's huge amount of stuff they did has been detrimental to the majority of people which is why they lost the election. Debt and tax is up, so are interest rates, yet public services are down - education, health, roads are all worse. Anyone who previously was susceptible to believing that greater taxation leads to greater service is now in no doubt that more tax leads to more waste. People are poorer than when Labour took office, their expendable income now gets spent on food. So Labour lost. People remember National being good times so they won. National put in place their 100 day plan and achieved it all, and have set another 30 point plan. This delivery is the complete antithesis of Ardern's short tenure. Luxon delivered in 100 days and set further targets. The untested CEO-type is passing his test so far. People are seeing Labour's incompetent constructs being removed. The hope from the election is perpetuated in centre right voters (the majority) every time a public servant cries about losing funding. Their vote is vindicated.

There is also one point of fact in the blog post that I will correct you on - about farmers not being looked after by National. Part of the waste-busting described above which appeals to the entire centre-right vote including farmers, the rural sector is regaining confidence from record lows because the Labour policies that were going to reduce farming have been rescinded. National is visibly doing battle with councils who still want to enact the Labour policies. Farmers are very happy with this.

Larry Mitchell said...

Boy do we miss Bruce Jesson ... or What.

new view said...

"and so little for everybody who isn’t already pretty well-off?"

So where does the meagre weekly pay that those who aren't already pretty well off come from Chris. Not the government, they don't have money. It's those that work that have the money and they don't have money unless their bosses have money, and if they don't have money no body has money, and no-body has money because the previous labour coalition spent it all. It seems that to make some money the government has decided to make conditions better for those capable of making it, and so by doing so there may be some more tax for the governments coffers so it can repair some infrastructure and whats left over support those that need it but can't earn it. Sort of like feeding and stroking the golden goose. That's my take anyway.
By the way the tax adjustments, not cuts, will temporarily help the majority that are caught up in the cost of living crisis, keep up with mortgages, paying staff and generally helping keep the economy ticking, and should have been done years ago and now is as good a time as ever.. IMO. Sensible I thought.