Going Forward: "Every revolution evaporates and leaves behind only the slime of a new bureaucracy." - Franz Kafka. Painting by Bosc d'Anjou
EVERY REVOLUTION is both rescued and undone by the
bureaucrats required to keep it alive. Sweeping away the old order is the easy
part. The hard part is establishing a new order that will not fall apart at the
first hint of political, economic and/or social trouble. A revolutionary
bureaucracy must be more than resilient, however. It also needs to create the
organisational architecture favourable to its long-term survival and growth.
Unfortunately, these bureaucratic structures have a tendency to ossify.
Imperceptibly, the new order becomes the old order and a new generation of
revolutionaries begins to stir.
The dramatic economic reforms introduced by the Fourth
Labour Government and its Finance Minister, Roger Douglas, were described by
the political journalist, Colin James, as
“The Quiet Revolution”. In quick succession, New Zealand floated its
currency, opened its borders and eliminated the subsidies which kept so much of
its economy afloat. The Labour Government then proceeded to “corporatize” New
Zealand’s publicly-owned industries: a process which saw tens-of-thousands of
New Zealanders lose their jobs.
In the space of just a few months, the old economic and
social order which National’s Rob Muldoon had struggled so hard to preserve was
swept away. Not the least remarkable aspect of the “Rogernomics Revolution” was
that it was accomplished without recourse to state-initiated violence.
Realising that what was being attempted in New Zealand was a
carbon-copy of the economic programme imposed upon 1970s Chile by General
Pinochet, one senior trade unionist warned the Labour Government that to carry
through such radical reforms it would have to put troops on the streets. He was
wrong. And the reason he was wrong was the breakneck speed with which the
bureaucratic structures required to make the “free-market” revolution work were
erected.
The explanation for the revolution’s rapid implementation
lay in the fact that it was conceived by a tightly-knit group of senior
bureaucrats located principally in the Reserve Bank and Treasury. Detailed
blueprints for the new economic order they were seeking had already been drawn
up. All these revolutionary bureaucrats lacked were the politicians needed to
build it. In David Lange, Roger Douglas, Richard Prebble, Michael Bassett and
Mike Moore they realised they had found them.
Only one significant obstacle to the revolution’s success
remained in place – the public service ethos of the old bureaucracy that was
being dismantled. A full and successful transition to the revolutionaries’ new
economic system, driven by the imperatives of the free-market, would not be
possible until the ingrained values of the old state-interventionist system it
was replacing had been destroyed.
The State Sector Act 1988 was designed to do just that.
Modelled on the administrative principles of the private sector, the new,
free-market bureaucracy was led by Chief Executives on lucrative five-year
contracts. Working on the assumption that the production of policy advice was
no different from the production of baked beans, these new state-sector bosses
could be recruited without risk from the private as well as the public sector.
That being the case, it was considered prudent to source the new public sector
mandarinate from those countries in which the free-market revolution had
already triumphed.
Unofficially, it was also considered vital that these new
free-market bureaucrats be strong enough to forestall the one eventuality that
could undermine the new regime – the election of a left-wing government
determined to roll back the free-market revolution of 1984-1993.
In the past, the “politicisation” of the public service had
been about politicians “persuading” their bureaucratic advisors to do the
government’s bidding. Under the new regime, this was turned on its head. The
trick, now, was to “persuade” any cabinet ministers still foolishly clinging-on
to left-wing ideas that their careers couldn’t possibly flourish until they
finally accepted that the free-market revolution was irreversible.
If history teaches us anything, however, it is that nothing
is irreversible. Mounting evidence of free-market capitalism’s failure has
stimulated new economic thinking both here in New Zealand and around the world.
The successors of those bureaucrats who facilitated the free-market revolution
of the 1980s and 90s are now being asked to oversee its dramatic
deconstruction. The eventuality they most feared, the election of a left-wing
government determined to return the market to its proper place, has come to
pass.
State Services Minister, Chris Hipkins, is demanding
wholesale “transformation” of the public sector.
Vive la revolution
This essay was
originally published in The Otago Daily Times and The Greymouth Star of
Friday, 22 June 2018.
