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.
