Doing The Right Thing For The Wrong Reasons. Labours "Unprincipled" Opposition To Asset Sales.

Are You Serious, David? Labour's reasons for opposing the partial sale of state energy generators have been as inadequate as they have been changeable. It's position would be improved dramatically if the party's leaders allowed themselves to be guided by the "democratic socialist" principles set forth in Labour's constitution.

“THE NATURAL RESOURCES of New Zealand belong to all the people and these resources, and in particular non-renewable resources, should be managed for the benefit of all, including future generations.” In any debate over the merits of public versus private ownership in New Zealand one might assume that these words, taken from the second, “Principles”, section of the Labour Party Constitution, would constitute the bedrock of the Labour Caucus’s argument.

For, surely, if any resources belonging to the people are alienated from the people, then they should be restored to the people. Indeed, such restoration should be mandatory given Labour’s “principle” that: “All people, either individually or in groups, may own wealth or property for their own use, but in any conflict of interest people are always more important than property and the state must ensure a just distribution of wealth.”

If ever there was a “conflict of interest” between the right of the people to benefit from the resources they own, and the right of wealthy individuals to convert public resources to private profit, it lies in the struggle over the partial sale of state-owned energy generators. On the basis of its founding principles, Labour’s position on these asset sales should be very simple and very clear. First: The assets belong to every New Zealander and should not, under any circumstances, be sold. Second: If the assets are sold they will be repurchased by the state at the earliest practical opportunity.

On this issue, Labour’s principles do not permit very much in the way of wiggle-room. If it is the obligation of the state to ensure a just distribution of wealth, then it is vital that the citizens’ access to something as important as energy not be restricted or rationed according to their ability to pay. The right of commoners to gather firewood on the lord’s estate was recognised as far back as the middle ages. To deny people the means of lighting and heating their homes, and cooking their food, was simply unthinkable. In the social-democratic New Zealand of 1935-1975, the successors of those medieval barons were required to pay their workers “a living wage” which incorporated the cost of energy. Massive state investment in hydro-electric power schemes from the 1940s to the 1980s made this possible by ensuring all New Zealanders had access to cheap and abundant electrical power. A Labour Party committed to its constitutional principles would make energy security a cornerstone of its appeal to Twenty-First Century voters.

Why then did the Phil Goff-led Labour Caucus shy away from basing its opposition to asset sales on the Labour Party’s constitutional principles mandating the public ownership of natural resources and a just distribution of wealth? And why hasn’t its successor, the David Shearer-led Labour Caucus, made a point of re-stating the party’s “democratic socialist” commitments? Could it be that Mr Shearer and his colleagues no longer subscribe to those beliefs?

From the very beginning of this latest privatisation drive Labour’s parliamentary leadership has offered a bewildering combination of explanations as to why the state-owned electricity generators should not be sold. Initially we were told that the energy assets were too profitable to justify privatisation. That the dividends they paid to the Treasury were so substantial that it made more commercial sense to simply borrow the sum any asset sales were likely to realise from international lenders. Then we were told that the sale of the state’s energy generators would see the shares in these strategic infrastructural assets being flicked on from domestic to foreign investors. Now we are told that the National-led Government’s efforts to ensure that most of the shares remain in Kiwi hands can only be achieved by ordinary taxpayers subsidising the Government’s “Loyalty Scheme”. Most importantly, however, from the point of view of first principles, New Zealanders have been told repeatedly that the Labour Party can give no guarantee that a future Labour Government will buy back the private sector’s shareholding in the state’s energy generators.

This refusal to commit to renationalisation is explained, in part, by Labour’s 2010 decision to exclude energy generation from the “closed list” of strategic infrastructural assets that the party’s economic policy-makers had recommended be run “in the New Zealand interest” and which foreign investors should be debarred from purchasing either in whole or in part (see here and here).

A more honest explanation for Labour’s refusal to endorse renationalisation, however, is simple embarrassment. Most Labour MPs would feel “naïve and stupid” advocating such a policy. Business leaders, civil servants and academics would ridicule their “1930s thinking” and they would be branded dinosaurs by their right-wing opponents in Parliament and the media. Labour’s Constitution may still declare that New Zealand’s natural resources “belong to all the people” and avow the state’s duty to “ensure a just distribution of wealth”, but the sort of people who make up Labour's current caucus are no longer prepared to pay even lip service to such “principles”.

That is why the Labour Caucus’s opposition to asset sales rings so hollow, and why the justifications for its position on this issue have been so inadequate and so changeable. Ideologically-speaking, the views of the party’s current MPs are little changed from those of the men and women who introduced and supported Rogernomics (and initiated the policy of full-scale privatisation in New Zealand). They no longer believe that the opportunities for private individuals to profit from the existential needs of their fellow human-beings should be progressively diminished and, ultimately, extinguished. The duty of twenty-first century policy-makers, as they see it, is to inform and expand the choices of free individuals operating in free markets. The only real difference between Labour’s spokesperson, David Parker, and National’s Finance Minister, Bill English, is that the former sees the state playing a much greater role in informing and expanding those choices than the latter.

Labour Party members should be on their guard. The weird peregrinations of their parliamentarians when it comes to explaining their opposition to asset sales is proof that their hearts are not truly in the fight. Eventually (and it may be sooner rather than later) the Caucus and its advisers will realise that the policy preferences of “modern social democracy” are incompatible with Section Two of Labour’s existing Constitution. Like Tony Blair, they will insist that the old commitments to wealth redistribution, public ownership and the “principles of democratic socialism” generally, be jettisoned in favour of a “new” Labour Party.

One that even Tories can vote for with a clear conscience.

This posting is exclusive to the Bowalley Road blogsite.

Power To The People?

People Power: Radical photographer, John Miller, took this photograph of people gathering for an anti-Vietnam War protest march down Queen Street on Bastille Day 1972. Forty years later another, much smaller, crowd gathered to protest against the partial sale of state assets. One of the saddest themes of the politics of the past four decades has been the steady demobilisation of the citizenry. In 2012, the demonstrators' cries of "Power to the People!" have taken on an increasingly hollow ring.

JOHN MILLER has been taking photographs of demonstrations for more than forty years. On Saturday, as the numbers slowly built for Auckland’s “Aotearoa is NOT for Sale” protest march up Queen Street, we ran into each other in Queen Elizabeth Square. With a wry grin, John handed me a photograph he’d taken of demonstrators at the same assembly point, on the same date, exactly forty years ago – 14 July 1972.

The cause that day was, as so many causes were in the 1960s and 70s, someone else’s. Though American troops were being pulled out of Vietnam as fast as President Nixon dared, the war in Indo-China rumbled on, with New Zealand, at least nominally, a part of it. The thousands of young faces in John’s photograph reflected their generation’s willingness to stand up and be counted as opponents of the morally insupportable contest between a nation of rice farmers and the most destructive military machine the world had ever seen.

“That one was clearly a lot bigger than this one’s going to be”, I commented, looking around the little square and registering how empty it was. Others seemed to share my sense of embarrassment at the low turnout, self-consciously lining the sides of the square. The only people willing to occupy its empty space were a brave band of young Chinese Christians. They held placards saying “Jesus Loves You” and sang hymns to the demonstrators.

“We could certainly use a little divine support!” I thought to myself as John hurried off to share his historical treasure with the other grizzled veterans of protests-gone-by. The first of the “Aotearoa is NOT for Sale” protests, on 28 April, had attracted up to 8,000 people, but it was already clear that this one wasn’t going to be even half that size.

I had feared it would be so. The law enabling the partial sale of the state-owned energy generators has been passed (albeit by a single vote) and the Government’s $120 million promotional effort is about to begin. Many New Zealanders, though deeply opposed to the sale of Mighty River Power, must’ve heard about Saturday’s protests and asked themselves: “What’s the point?”

On the other hand, the country’s attention had been focused for a whole week on the Maori Council’s bid to convince the Waitangi Tribunal that the sale of the hydro-electricity SOEs should be postponed until the vexing question of who does, and who does not, hold a proprietary interest in the water that spins their humming turbines is resolved. It was just possible that people might reconsider their decision that partial asset sales are now a “done deal” – and re-join the protest movement.

It was a false hope. While Maori are obviously concerned to secure a seat at the table when it comes to dividing up the spoils of the partial privatisation process, it is by no means clear that Maoridom as a whole is opposed to the sale of state assets per se. There was encouraging testimony at the Waitangi Tribunal hearings from individual Maori hapu who promised to act as the kaitiaki – guardians – of New Zealand’s lakes, rivers and streams. But, representatives of the much more powerful Iwi Leaders Group spoke elsewhere (and approvingly) of “market mechanisms”, “reserved share-holdings” and “royalties”.

There are times when your enemy’s enemy is not your friend.

And so the drums started beating, the marchers chanted “Power to the People!”, and the ragged column of 2,500 to 3,000 souls began it’s slow trudge up Queen Street. I looked around me and saw the multi-coloured union and political party flags fluttering, and the hand-painted banners bobbing up and down. (The best I saw read: “New Zealand: 51 percent pure – 49 percent for sale.”). “Who’s got the power?” Someone bellowed. “We’ve got the power!” the marchers bellowed back.

I lifted up my eyes and the gleaming towers of the banks and finance houses seemed to lunge towards me: BNZ, AXA, Deloittes, ANZ, National Bank: giants of glass and steel standing like sentinels along the length of Queen Street. I wondered how impressive we looked from those top floors. Did the financiers, looking down, see a torrent of angry humanity pouring through that narrow canyon like a river in flood? Or did they see a line of scurrying ants: too tiny and remote to merit more than a dismissive sneer?

A Question Of Perspective: A raging human torrent - or scurrying ants?

At the end, as always, there were speeches and resolutions. Representatives from the Opposition parties spoke: Phil Twyford for Labour (last time it was David Shearer) Julie Anne Genter and Russel Norman for the Greens. I listened carefully, but only John Minto, speaking for the Mana Party, was willing to make the one political commitment capable of worrying the watchers in those glass towers:

“If elected,” said Mr Minto, “we will renationalise any asset that has been sold, and deduct any dividends paid from the purchasers’ compensation.”

This essay was originally published in The Press of Tuesday, 17 July 2012.

Sky Is Not The Limit: Restoring Public Media

Searching For A New Signal: The restoration of genuine public broadcasting - and the reinvigoration of New Zealand democracy - could begin with the nationalisation of the Sky Television Network.

WHILE THE LAW COMMISSION’s latest Issues Paper has raised a number of important questions about how best to regulate the content of the news media, there is much less interest in discussing news media ownership. The political class, in particular, tends to run a mile from such discussions. The extraordinary domination of the New Zealand media market by just a handful of overseas-owned media conglomerates is one of those things that polite politicians simply do not discuss.

The implications of foreign media ownership for the quality of New Zealand democracy are, however, substantial. The maximisation of profit, unconstrained by even a residual sense of national responsibility, can only lead to the relentless downgrading of journalistic standards and the elevation of entertainment over news values. Intellectually taxing and culturally challenging media products are increasingly relegated to niche markets and the steady dumbing-down of the mass media’s bill-of-fare continues apace.

The question which politicians of the Left should be asking themselves is a simple one: ‘Do dumbed-down consumers make better, or worse, democratic decisions than well-informed citizens?’ And if they concede that an ignorant population is incompatible with an effective democracy, then what do they propose to do about foreign control of the New Zealand news media? In particular, what do they propose to do about the growing domination of the Rupert Murdoch-owned Sky Television Network?

Shortly before the General Election a senior media entrepreneur told me that within two years Sky would find itself in exactly the same position as the old, state-owned NZBC: exerting something perilously close to monopoly control over New Zealand broadcasting. With a friendly government willing to look the other way, Sky may soon be in a position to either drive out or absorb what remains of its on-screen competition. This country’s extensive cross-media ownership could also see Sky acquiring most of New Zealand’s radio audiences as a sort of broadcasting by-catch. Complaints about anti-competitive behaviour would be answered by pointing to the existence of the isolated, under-staffed and politically beleaguered state-owned broadcasting system.

A foreign-owned, privately controlled broadcasting network occupying a near-monopoly position within the New Zealand media market should be anathema to Labour, Green, NZ First and Mana politicians. Together, these parties of the Centre Left should take serious thought as to how the growing power of the Sky Television Network might be constrained, and public broadcasting restored to its former status as the prime guarantor of a well-informed and actively engaged democratic citizenry.

In my view, the most successful re-nationalisation strategy would involve a two-pronged regulatory thrust at the core of Sky’s profitability. The first thrust would involve passing a law limiting the amount of foreign share-holding in any New Zealand television network to ten percent. This would require a massive sell-off of foreign-owned shares – sharply depressing their value. Television New Zealand and Radio New Zealand could then be furnished with sufficient funds to acquire these shares on the public’s behalf. At the same time legislation would be introduced to Parliament requiring all existing networks to re-apply for a broadcasting licence. These would only be issued if the owners undertook to offer their viewers and listeners a comprehensive news and current-affairs service, and were ready to commission a generous quantity of local drama, documentary, children’s and ethnically-oriented programmes. The high cost of these licencing requirements would further depress the value of Sky’s shares, greatly facilitating their purchase by the state-owned broadcasters.

It would, of course, still be in the interests of the main content providers to sell their product to the new state-owned Pay-TV network. It’s monopsonistic (look it up!) position in the New Zealand market would, however, allow it to purchase that content at a significantly lower price. The subscription-price would be reduced accordingly (but not set so low that the public-service requirements of the State Broadcasters’ free-to-air programming could not be assured of a generous subsidy).

The Right will, naturally, protest loudly at such a policy. Dire warnings will be issued about the “sovietisation” of the New Zealand media, and the grave threats this policy would pose to our democratic way of life. They are, of course, the same people who cheered when the National Government of Jim Bolger legislated away the rights of hundreds of thousands of New Zealand workers with the Employment Contracts Act. And they will no doubt cheer again when, over the objections of nearly three-quarters of the population, our state-owned energy companies are “partially” privatised. They are also the people who have remained suspiciously silent as the democracy they so loudly claim to prize has been consistently undermined and weakened by the dumbed-down programming of the market-driven news media.

In his book The Economics of Feasible Socialism, Alexander Nove wrote of nationalisation:

The original notion was that nationalization would achieve three objectives. One was to dispossess the big capitalists. The second was to divert the profits from private appropriation to the public purse. Thirdly, the nationalized sector would serve the public good rather than try to make private profits ...To these objectives some (but not all) would add some sort of workers’ control, the accountability of management to employees.

Having seen what the “big capitalists” have done, and are continuing to do, to our world, policies directed towards refilling the “public purse”, upholding the “public good”, and increasing the “accountability of management”, recommend themselves as not only well worth a second look – but a second go.

And rest assured, Sky is not the limit. 

This posting is exclusive to the Bowalley Road blogsite.