Neoliberalism: Coming And Going.

The Beneficiary Of Chaos: Television New Zealand’s current affairs flagship, Q+A, interviewed Stephen Jennings, the former Treasury official and New Zealand investment banker who took advantage of the collapse of the Soviet Union to make himself a billionaire.

 

IT WAS A LONG TIME AGO, the late-1970s, possibly, or the very early 1980s. My father and I were watching one of the many current affairs shows then broadcast by the state-owned television network. The guest was a very young Alan Gibbs – at least that’s the way I remember it. If it wasn’t him, then it was someone who looked and sounded very much like him.

 

It was an odd interview. Not in terms of the production itself, but because in those days people espousing the views of businessmen like Alan Gibbs were very few and far between. In New Zealand, at least, the post-war Keynesian settlement still reigned supreme. Lassiez-faire capitalism was something students read about in economic history textbooks. In the 1970s, most responsible intellectuals dismissed unregulated capitalism as a ruthless and highly exploitative form of economic management, long since discarded by civilised nations.

 

That’s what made the interview so memorable. The young businessman (Gibbs?) withstood the interviewer’s rather condescending line of questioning without flinching. Every aspect of the post-war settlement: the welfare state; public ownership; compulsory unionism; import-licencing; guaranteed prices; came under his withering critique. My father and I looked at each other in alarm. We’d never heard anything like it. At the conclusion of the interview, my father turned to me and said: “Men like that are dangerous, son. If they ever gain a serious following in this country they will cause tremendous harm.”

 

It was New Zealand’s first encounter with what we today call “neoliberalism”. Within five years of that interview, however, Keynesianism was on the defensive. Businessmen like Gibbs and his fellow asset strippers were being lionised in the business press. Defenders of the status quo, like Rob Muldoon, were being pilloried. The new economic order, guarded by Margaret Thatcher in the UK, and Ronald Reagan in the USA, had made the world safe of dangerous men. Here in New Zealand – just as my father had predicted – they were all getting ready to inflict tremendous harm.

 

What made me think of this prophetic television encounter from 40 years ago? Unsurprisingly, it was another current-affairs interview.

 

On Sunday’s Q+A (17/7/16) Corin Dann interviewed Stephen Jennings, the former Treasury official and New Zealand investment banker who took advantage of the collapse of the Soviet Union to make himself a billionaire.

 

Jennings’ firm, Renaissance Capital, made five billion dollars buying and selling the property of the Russian people. The new, laissez-faire economy Jennings and his fellow oligarchs constructed on the ruins of the USSR proved to be more than usually dangerous. Perhaps the most dramatic measure of the tremendous harm it inflicted was that, as the Oligarchs and their kleptocrat political allies imposed capitalism on their nation from above, the life expectancy of the Russians actually fell.

 

Today, Jennings oversees a continent-wide property development enterprise constructing massive suburbs on the outskirts of African largest cities. As low-wage economies cascade out of Asia and into the last, great, untapped pool of cheap labour on the planet, Jennings will be there to ensure that their new, middle-class overseers have somewhere suitable to live.

 

Whether Africans prove to be as biddable as Russians remains to be seen. All the signs point to the great wave of globalisation, out of which Jennings extracted his super-profits, as having already broken. As it recedes, the neoliberal doctrine, which for forty years has been used to justify the globalisers’ moral and environmental excesses, is beginning to sound increasingly hollow.

 

Not, of course, to the members of the NZ Initiative (successor organisation to the NZ Business Roundtable) who were happy to provide an audience for Jennings’ unreconstructed neoliberalism. Nor, indeed, to Act’s David Seymour, in whose “Free Press” newsletter Jennings is lauded like a rock-star. But to those of us who have heard enough neoliberal rhetoric over the past 40 years to last several lifetimes, Jennings performance came across as just one more iteration of a policy prescription that has succeeded only in making the world a less equal, less habitable, and less free place in which to live.

 

As Dann concluded his interview with Jennings, it occurred to me that I had been witness to both the beginning and the end of an era. Gibbs and Jennings are neoliberal proselytisers of formidable energy and unwavering certainty. That much, at least, remains unchanged. The difference, of course, is that in that first interview the ideas expressed had yet to be tested in a modern context. In Jennings’s case that is obviously no longer true. The world now knows what happens when capitalism is unbound. Its harm is all around us.

 

My father knew, instinctively, that business leaders like Gibbs and Jennings were dangerous men. Would that he had lived long enough to see the self-serving character of their ideology made obvious to everyone.

 

This essay was originally posted on The Daily Blog of Monday, 18 July 2016.

Sir Paul Holmes 1950 - 2013: The Passing Of A Conservative Champion

Conservative Champion: Over four decades of broadcasting to suburban and provincial New Zealand, Sir Paul Holmes never tired of presenting his inherited prejudices as the very essence of common sense. With his death the forces of conservatism have lost a powerful spokesman.

 

THE DEATH of Sir Paul Holmes has been received with genuine dismay and grief by conservative New Zealanders. Like the many progressive Kiwis who mourned the death of left-wing writer, Bruce Jesson, in 1999, the forces of conservatism understand that they have lost a formidable champion. At Sir Paul’s funeral, as they did at Bruce’s, mourners will hear the tributes of many illustrious New Zealanders and murmur: “We will not see his like again.”

 

To read that Sir Paul was a champion of the Right may startle many of his admirers. The man, himself, would have bridled with characteristic theatricality at such a description. Throughout his long career Sir Paul had worked tirelessly to perfect his public persona as the Kiwi “Everyman”. Inspired by that other gargantuan egotist, Charles De Gaulle, Sir Paul would likely have insisted that “Holmes is not of the Left; Holmes is not of the Right: Holmes is above!”

 

But it was precisely in his “Man of the People” costume that Sir Paul’s usefulness to the forces of conservatism inhered. Over four decades of broadcasting to suburban New Zealand, Sir Paul never tired of presenting his inherited provincial prejudices as the very essence of common sense.

 

In London and Vienna, the precociously clever boy from Hastings may have rubbed shoulders with all kinds of sophisticated cosmopolitans, but he was careful to avoid the contagion of their critical intellectualism. His hatred of intellectual “elites” was life-long and visceral. Sir Paul’s voracious appetite for information was almost entirely dedicated to defending his listeners’ and viewers’ right to be wrong.

 

The contrast with Bruce Jesson, one of New Zealand’s rare public intellectuals, could hardly be starker. Bruce devoted his life to dissecting and exposing the hollowness of New Zealand society. He investigated the cosy networks smothering its business community; attacked the Labour Party’s and the trade unions’ narrowness of vision; and castigated the universities for their failure to act as New Zealand’s critic and conscience. Bruce was the implacable foe of New Zealand’s provincial mediocrity – most particularly of its ingrained anti-intellectualism and its spineless deference to the contrived hierarchies of monarchy. Even had a Labour Government been brave enough to offer him a knighthood – Bruce would never have accepted it. He died a convinced and proud republican.

 

Progressive Champion: The contrast between the left-wing public intellectual, Bruce Jesson, and Sir Paul Holmes could hardly have been starker.

 

Sir Paul has been hailed as a broadcasting wunderkind and identified as the leader of a revolution in radio and television current affairs. Had he been the inventor of talk radio and personality-centred current-affairs television such titles might have been justified. More accurately, Sir Paul should be remembered as the broadcaster temperamentally best suited to providing the “infotainment” product that the new, commercially-driven radio and television networks were demanding. In this endeavour his ability to stroke the prejudices and inflame the grievances of suburban and provincial New Zealanders is justly celebrated.

 

As his audiences grew and his unique broadcasting talents propelled him into the extremely influential 7:00pm time-slot, Sir Paul and TVNZ’s Holmes Show found themselves in an extraordinarily powerful political position. Inevitably, the forces of conservatism lost little time in exploiting that power.

 

In October 2000, for example, Sir Paul and the Holmes Show lent the weight of its influence to a campaign supposedly organised by young and talented Kiwis driven offshore by the policies of the Labour-Alliance Government. In reality, the “Generation Lost” campaign was the work of the Business Roundtable and its public relations firm. As I wrote in The Independent Business Weekly of 11 October 2000:

 

“Mr Holmes has declared that he did not know of the Business Roundtable’s involvement when his show went to air last Wednesday evening. If this is correct, then Mr Holmes should immediately resign his position as the nation’s premier broadcaster. No one with the years of journalistic experience that Mr Holmes boasts should have accepted [the campaign’s] advertisement at its face value. The blatantly anti-government message at the heart of [the] campaign would normally have sent alarm bells ringing throughout Television New Zealand. To put [it] on air without checking the bona fides of [its] claims to political neutrality was an unforgivable lapse of professionalism.”

 

I continue to wonder how many of the other politically-charged causes championed by Sir Paul over the past two decades were of similar unacknowledged and highly-dubious provenance.

 

It would be remiss of me, however, to close without recalling Sir Paul’s extraordinary response to the 2004 hikoi opposing Labour’s Foreshore & Seabed Bill.

 

A lesser man (and a more convinced right-winger) might have used the day’s tumultuous events to further inflame New Zealand’s already tender race-relations. Instead, Sir Paul ended the programme’s coverage with these words:

 

“No New Zealander, frankly, could have watched proceedings today without a sense of pride, without being gripped by the heart, could have watched it – without love.”

 

Requiescat In Pace, Sir Paul Holmes.

 

This essay was originally published in The Press of Tuesday, 5 February 2013.

Johnny & Billy - Zombie Slayers?

Night of the Living Dead: This 1968 horror classic features creatures that refuse to die. Is the National Government battling a neo-liberal establishment which similarly refuses to accept its own mortality?

IS THIS GOVERNMENT really the free-market horror film its left-wing critics make it out to be? Or, are John Key’s and Bill English’s most daunting political challengers now coming at them from the Right?

Not if you subscribe to the Left’s political narrative.

According to Labour and its left-wing allies, John Key is a hard-line free-marketeer who had to be "sold" to the New Zealand electorate (principally by the Australian political consultancy, Crosby-Textor) as a benign centrist. Had Key not adopted this persona, the Left insists, he would never have been elected. Which means National’s election-winning formula: Labour-lite + tax-cuts; cannot be abandoned before 2011 without putting its re-election at risk. Consequently, Key must wait until he wins a second term before unleashing his "secret" agenda: radical welfare reform + wholesale deregulation and privatisation.

But what if we are actually watching a very different movie? What if, far from being a sort of antipodean werewolf, impatiently waiting for the next electoral full moon so he can tear to shreds what remains of the egalitarian New Zealand dream, Key really is a moderate? What if the horror-movie we’re watching isn’t The Howling, but a political version of Night of the Living Dead, in which Key and his Finance Minister desperately battle the reanimated corpses of economic and social policies everyone believed dead and buried in the 1990s?

Now, that would be a real horror-show.

So, has the Budget really got the zombies pounding on the Beehive door? Well, National’s far-Right allies were certainly vocally unimpressed by Bill English’s "Road to Recovery". Act Leader, Rodney Hide, (as befits his ministerial status) has remained silent, but the keeper of the party’s ideological flame, Sir Roger Douglas, has unleashed volley after volley of verbal scorn upon English’s economic programme.

"This is the budget of deficits", thundered the former Finance Minister on Budget Day. "A deficit of spending, a deficit of the current account, a deficit of courage, but most importantly, a deficit of imagination."

But what would a budget which passed Sir Roger’s imagination test look like? What do the unreconstructed disciples of Milton Friedman and Friedrich von Hayek actually want from John Key and Bill English? And could Key’s government possibly deliver it?

Fortunately, former Act MP, and proprietor of the NZ Centre for Political Research website, Muriel Newman, also wanted answers to these questions, and asked the Executive Director of the NZ Business Roundtable, Roger Kerr, to supply them.

In his guest commentary to the NZCPR Weekly newsletter, Kerr is careful not to be too specific in his recommendations, but the overall direction of his proposed programme of "reform" is reasonably clear.

He applauds what he claims is Bill English’s emphasis on "structural adjustment" – meaning a "shift of resources from the domestic economy to internationally competing industries". This "basic change in economic direction", says Kerr, is one of the (all-too-few?) "positive features" of the Budget.

What that ominous term "structural adjustment" means in plain English, is that Kerr very badly wants this Government to slash public spending on the goods and services New Zealanders consume, and redirect the state’s resources towards private businesses producing goods and services that foreigners consume.

In reality, there’s very little in this Budget that redirects resources in the way Kerr suggests. Indeed, English has been criticised by many commentators for maintaining the level of state spending in health, education and social welfare at the expense of the export sector. He did, after all, cut back on state support for research and development and skills training – both of which are crucial to lifting productivity.

To be blunt, I think Kerr is confusing what English has actually done, with what the Business Roundtable would like him to do. It’s a frequent mistake among left-wing ideologues, especially those dealing with conservative social-democratic governments – so it’s comforting to discover that right-wing ideologues suffer from the same wishful thinking.

The key passage in Kerr’s commentary, however, is this one:

"If we are to [catch up with Australian income levels by 2025] the government (and the community at large) have to recognise the need for policy settings much more like those of more successful countries. We can’t continue avoiding ‘third rail’ issues such as the superannuation eligibility age, privatisation of commercial businesses, a freer labour market and welfare reform."

In unpacking that heavily loaded sentence, we catch a glimpse of the sort of New Zealand the Business Roundtable is hoping to create.

It will be a New Zealand without unions. What else can "freer" mean when, already, barely seven percent of the private sector workforce is unionised? To further "free" the labour market, the public sector unions covering teachers, nurses and civil servants would have to be targeted. But, eliminating these powerful democratic institutions will not be achieved without massive political upheaval.

The same, of course, might be said about imposing "welfare reform" – a code-word for radically restricting citizens’ access to transfer payments, usually by limiting the period of eligibility to 3 months, or less.

Limiting elderly New Zealanders’ access to superannuation, by lifting the age of entitlement to 67, or more, and privatising what remains of the publicly-owned airways, railways and electricity generators rounds out Kerr’s vision of the future. Clearly, the Business Roundtable’s "ideal" New Zealand is going be a much less generous – and a much more politically contentious – country in which to live.

Or will it? Given that Kerr holds up both Hong Kong and Singapore as models of "small, high income countries" (‘with authoritarian governments’, he should have, but unaccountably failed, to add) political dissent may not be all that welcome in the Business Roundtable’s brave new world.

Writing about the current global economic crisis in The London Review of Books, recently, the veteran British labour historian, Ross McKibbin observed:

"The present crisis has established beyond doubt that neoliberalism, even the British form, and democracy are incompatible. To try to make them compatible, governments have adopted ever more risky policies, which brought down the last Conservative government and will probably bring down Brown’s."

"Risky" is a most inadequate word to describe the prescription which Kerr is offering Key and English. Filling it would be political suicide.

Perhaps, the Left should reconsider its rather gruesome characterisation of National’s leaders. Compared to the undead ideological creatures pounding on their door, who do Key and English more resemble: villains – or heroes?

This commentary was originally published in The Independent of Thursday, 11 June 2009.

That Loving Feeling

A new historic compromise? Just as the post-World War II "historic compromise" between capital and labour ushered in a 30-year period of working-class growth and consolidation, the new relationship between the Pakeha and Maori capitalist elites (symbolised here by Tariana Turia and John Key) looks set to transform New Zealand's economic, cultural and political environment - and not, in this case, to the Left's advantage.

WAITANGI was a love-in this year. We must put to one side the assault on the Prime Minister by two Northland Maori protesting the National-Maori Party alliance. Their action was small, uncoordinated and aggressive precisely because it did not enjoy the support (much less reflect the generally positive mood) of the Maori people. For the first time in a long time there were no angry denunciations of colonial treachery, no argy-bargy with the Police, and no ambushes in the wharenui. Indeed, recalling the dramatic events of past Waitangi Days, this year’s love-in seemed positively unpatriotic.

What has happened in the five years since Don Brash’s notorious Orewa Speech inspired genuine mud-slinging and abuse? How is it possible that John Key can be welcomed onto our national marae with the same genuine warmth Norman Kirk received way back in 1973? What lies behind this extraordinary rapprochement between Maori and Pakeha?

At the root of all these changes lies the succession of Treaty settlements negotiated by both the National and Labour parties since the late-1980s. Though representing only a fraction of the value of the lands, forests and fisheries alienated from Maori control by the 19th Century colonial authorities, the capital base provided by the settlement process is, nevertheless, slowly transforming iwi corporates into key players in the New Zealand economy.

In less than a decade it is likely that the big iwi corporations will constitute this country’s largest domestically-owned business enterprises. Their holdings in the tourism, forestry and fishing industries will generate a growing proportion of our national income, and, even more significantly, as the legislation controlling the use of Maori land-holdings is made increasingly facilitative of Maori commercial development, the iwi corporates will be exerting a growing influence over New Zealand’s core primary production industries – dairying, meat and wool.

The explanation for this revolution in economic and, inevitably, political power is simple. The nature of iwi corporate structures renders them immune to takeover by foreign interests. The owners of the Maori corporations will always define themselves as tangata whenua before they define themselves as financial stakeholders in a commercial enterprise. That being so, they would no more countenance losing control of the tribe’s assets – its taonga – than they would countenance the loss of their people’s mana – which, in the world of the Maori, amounts to much the same thing.

Remarkably, it was the Right which first recognised the true significance of the Treaty settlement process: that tribal capitalism was destined to become the critical guarantor of capitalist relations generally in New Zealand.

National and Labour’s attempts to roll back the Treaty-settlement process – whether it be Helen Clark’s and Michael Cullen’s effective re-nationalisation of the foreshore and seabed, or Don Brash’s swingeing attack on Maori "privilege" – represented what was almost certainly the last, concerted effort on the part of the traditional, European elites to re-colonise the Maori-Pakeha relationship.

Maoridom’s response: the massive hikoi which descended on Parliament in May 2004, along with the simultaneous formation of the Maori Party; demonstrated the futility of this strategy. Wiser political heads, most notably in the Business Roundtable, realised that a more intelligent strategy, one based on the carefully managed assimilation of Maoridom’s economic and political elites into a broader, bi-cultural Aotearoa-New Zealand ruling class, has become Kiwi capitalism’s most urgent priority.

The skill with which Don Brash’s successor, John Key, has managed this recalibration of the Right’s relationship with Maori has been considerable. Not only has he been able to replicate the close ties National enjoyed with the Maori aristocracy throughout the 1950s and 60s, but by his assiduous courtship of the Maori Party MPs, he has also been able to harness the goodwill of the Maori Party’s supporters to National’s new deal in New Zealand race relations.

In doing so he has almost effortlessly parted the Labour Party from one of its most reliable bases of electoral support. The respect Maori culture bestows upon leaders, along with its infatuation with prestige, means that the Maori-National alliance has every chance of enduring well into the future. Underlying the new relationship will be the expanding amount of ideological common ground shared by Maori and Pakeha capitalists.

It is, indeed, a new day for the Maori people, not because, at the level of the typical working-class Maori family, life has got materially better, but because for the first time in a long time they feel that the colonial victors want (and need) more from them as a people than their sullen acquiescence at being last hired, first fired.

For that, John Key will win not only their support, he’ll claim their love.

The above is a slightly modified version of an essay which first appeared in the Timaru Herald, The Taranaki Daily News, The Otago Daily Times and The Greymouth Evening Star on Friday 6th February 2009.