Forty Years Of Remembering To Forget.

The Beginning of the End: Rogernomics became the short-hand descriptor for all the radical changes that swept away New Zealand’s social-democratic economy and society between 1984 and 1990. In the bitterest of ironies, those changes were introduced by the very same party which had entrenched New Zealand social-democracy 50 years earlier. Labour has yet to atone adequately for its most grievous historical sin.

EVERYBODY AND THEIR DOG, it seems, is marking the 40th anniversary of “Rogernomics” by writing about its meaning and legacy. The plain fact, of course, is that any journalist with a serious interest in politics and economics should have been writing about little else since 1984. Rogernomics is the driving narrative of our times.

Over the span of those 40 years, the term for the phenomena described by Rogernomics has changed frequently.

In the years preceding the election of the Fourth Labour Government, when New Zealand journalists still had their eyes on the “overseas” depredations of Margaret Thatcher and Ronald Reagan, the analytical catch-all phrase was “The New Right”. When the nostrums of Thatcher and Reagan arrived on these shores they were bundled together under the heading of “Labour’s Free Market Policies”. Then, Rob Campbell (still a prominent trade unionist in the mid-1980s, as well as a popular columnist for the Sunday Star-Times) translated the US catch-all term Reaganomics into Rogernomics.

That one stuck.

Rogernomics became the short-hand descriptor for all the radical changes that swept away New Zealand’s social-democratic economy and society between 1984 and 1990. In the bitterest of ironies, those changes were introduced by the very same party which had entrenched New Zealand social-democracy 50 years earlier. Labour has yet to atone adequately for its most grievous historical sin.

As the years, and then the decades, passed, however, Rogernomics seemed increasingly inadequate to the task of describing the new society that was taking shape – let alone the ideological foundations upon which it was being built. Some writers, well aware of the historical origins of the ideas that were now driving not only New Zealand’s, but the entire world’s, economic thinking tried, unsuccessfully, to attach the “Classical Liberal” label to them.

For journalistic purposes, however, the word “classical” was just too old and too dusty to characterise an ideology that was relentlessly laying waste to old and dusty things. For reporters without the slightest grounding in economic history, the policies being implemented all around them seemed new and dynamic. Twenty-something journalists weren’t to know that similar policies had been tried, and had failed, a century before they were born. They didn’t care – history was so last millennium!

A better word than Rogernomics still had to be found. Something with intellectual heft – and a twenty-first century ring to it. If the soubriquet “Neo” was good enough for the hero of the Matrix, then it was also good enough to update and turbocharge the rather lame legacy of economic and political liberalism. Thus was born “neo-liberalism”. But, since hyphens, too, were old and dusty, the noun was swiftly shortened to, “neoliberalism”.

That one stuck, too.

There was, however, another reason why the shock of the neo was crucial to the changed economic, social and political order. As everybody who’s ever taken a marketing course (and that includes far too many journalists!) will be aware, describing a product as “new” gives it a palpable edge. Because who wants to buy something “old” – right?

Certainly not the neoliberals, and certainly not the Labour politicians and their advisers charged with making as many New Zealanders as possible cringe when they “remembered” what their country was like before Rogernomics picked it up by the scruff of the neck and set it on the right track to a freer and more prosperous future.

And, boy, were they good at it! Even today, 40 years later, journalists who were barely out of nappies in 1984, will roll out the same terrible hardships listed by the Rogernomes as they set about persuading their fellow citizens that the New Zealand of 1935-1984 was a cross between a Soviet supermarket and a Polish shipyard. Whole bulldozers, they said, could be made to disappear completely by New Zealand Railways. If you wanted to subscribe to a foreign magazine, then you had to apply in advance to the Reserve Bank for the necessary ‘overseas funds’. Everything closed for the weekend. There were no decent restaurants. And, you could not get a decent cup of coffee for love or money!

It would be quite wrong to suggest that there was no truth at all to any of these carefully crafted anecdotes. But, truth or falsehood wasn’t really the point. Their real value lay not in what they encouraged people to remember about the years before Rogernomics, but in what they made it so much easier for people to forget.

We Kiwis are an insecure bunch, and nothing encourages our tendency towards cultural cringe more successfully than suggesting the rest of the world sees us as being out-of-touch and behind-the-times. Who hasn’t heard about the story of the American tourist who, having been dropped-off in downtown Auckland, was obliged to set his watch back twenty years?

In the end, the number of Kiwis who wanted their country to be “just like overseas” was more than enough to make it happen. When the Rogernomes set out to eliminate the “dinosaur” institutions of old New Zealand, they were pushing on an open door.

What New Zealanders failed to grasp (or willfully ignored) was that the highly-taxed, highly-regulated economy that the Rogernomes and their neoliberal successors set out to dismantle and destroy, was also the economy that made it possible for the overwhelming majority of Kiwis to have a job, own their own home, save for their retirement, and fund a public health and education system that allowed them to predict with confidence a life for their children that would be better and more fulfilling than their own.

Yes, the “opening up of New Zealand” meant 24/7 shopping, excellent restaurants, and world-beating coffee. But, it also meant that the men and women who had cringed at the thought of living in a country that closed for the weekend would, as the price of their unimpeded retail therapy, be required to watch their children grow up in an nation that made them pay for their tertiary qualifications, spend the first 5-10 years of their working lives paying off their student loans, and watching, helplessly, as house prices climbed beyond their reach.

And that was just the middle-class! What the Rogernomes and neoliberals are determined to make New Zealanders forget is that the shift from a highly-taxed, highly-regulated economy, to one guided by the Nineteenth Century doctrine of laissez-faire, was made possible by the deliberate and brutal impoverishment of working-class Māori and Pasifika. God knows, the old New Zealand could, and should, have treated its non-Pakeha population much better than it did, but at least in the years prior to 1984 the stats were headed in the right direction. By the mid-80s, close to two-thirds of Māori living in Auckland owned their own home. Within 40 years, that number had fallen to 18 percent.

Everything comes at a price – even a decent cup of coffee.

This essay was originally posted on The Democracy Project substack page on Monday, 2 September 2024.

Act’s Message: Cheerfully Libertarian? Or, Radically Right-Wing?

Mr Pushmepullyou: Pushed by the need for votes, Act's leader, David Seymour, like Richard Prebble before him, has reached out to the dark side of the New Zealand electorate. Much as he would prefer to pull in support on the strength of Act's sunny libertarianism, there just ain't enough Eighteenth Century liberals living in New Zealand to make such a party a viable electoral proposition. Although, God knows, Act has tried!

DAVID SEYMOUR IS DISCOVERING what Roger Douglas and Derek Quigley learned in 1994 – the first year of Acts’s existence. That the sort of supporters the party wants are pathetically few in number – far fewer than the sort of supporters it doesn’t want.

From the moment it was formed, the Association of Consumers and Taxpayers had everything a political movement needs to succeed: leaders and spokespeople who were well known; a coherent political ideology; a detailed economic programme; access to large audiences of potential supporters; and money – lots and lots of money. In Act’s first year, it has been estimated that the millionaire entrepreneur, Craig Heatley, spent one million dollars introducing the new political party to the New Zealand electorate.

On paper, Act should have succeeded, but it did not. After a year of touring the country. After a year of free media, and a million dollars’ worth of ads and pamphlets, the opinion polls showed Act hovering just below, or just over, 1 percent. Not enough. No matter how many factory owners obligingly “invited” their employees to hear Douglas’s pitch; no matter how many university campuses Quigley visited; the result was the same. At the point-of-sale, Act lacked the one thing a political movement must have to succeed: a message people want to hear.

Act’s message was liberal in the classical, eighteenth century, sense. Douglas and Quigley preached the gospel of the sovereign, self-actualising, utility-maximising individual, and located him in an economic and cultural environment where state interference is reduced to the absolute minimum. The principle Act subscribed to most enthusiastically was laissez-faire. The doctrine of laissez-faire – “allow to do” – embraced more than free markets, it looked forward to a world without bullies and/or busy-bodies. A permissive world based on the “freedom to” become the best person you can be. A libertarian world.

Or not. New Zealand’s leading Libertarian, Lindsay Perigo, walked out of the founding Act conference, denouncing its refusal to declare total war on the state, and insisting that what Douglas and Quigley were proposing was anything but libertarian. Perigo was free to split ideological hairs because he, unlike Douglas and Quigley, had no real experience of down-and-dirty retail politics. Purity and practical politics don’t mix.

Also present at Act’s founding conference, even if she had no intention of taking part, was the redoubtable left-wing activist, Sue Bradford. With considerably more political savvy than Perigo, Bradford denounced Act as an extreme right-wing party dedicated to finishing the job which Douglas had started. This description of Act was picked up by the news media and repeated ad nauseum. No matter how hard it tried, the Act Party was never able to convince the nation that Bradford’s definition was mistaken. She had branded Act for life.

Not that the “extreme right-wing” brand bothered Richard Prebble all that much. Watching from the sidelines, he was content to let Douglas discover the hard way how very few votes there were in the philosophical doctrines of the Eighteenth Century, or, for that matter, in Ayn Rand’s Objectivist fantasies of the 1940s and 50s. Prebble knew where to go looking for the votes Act needed: exactly which stones, in which dark places, it would be necessary to lift up.

Prebble understood better than just about anybody what MMP was making possible. Parties of the far-Left and the far-Right had never prospered in New Zealand for the very simple reason that the First-Past-the-Post electoral system (which the country had just discarded) made it virtually impossible for such parties to win seats. The one party which had succeeded in doing so was the Social Credit Political League, but only when popular hostility to both National and Labour was strong enough to transform Social Credit into a repository for “protest votes”. Even then, Social Credit was never able to win more than 2 seats.

Prebble was well aware that in the most propitious of political circumstances upwards of 20 percent of the electorate could be susceptible to the blandishments of a third party. Since Act could not expect many votes from the Left (not with Jim Anderton’s Alliance competing so successfully against Labour) the votes he needed belonged to those right-wing New Zealanders who believed that on matters relating to Māori, law-and-order, public morality, women, gays, unions and the environment, the National Party had aligned itself far too closely with Labour. Where is the advantage, Prebble asked his Act colleagues, in allowing Winston Peters to go on sweeping up all these votes?

Taking his inspiration from the right-wing of the US Republican Party, Prebble set about transforming Act into a far-right populist party – albeit one represented by carefully chosen neoliberal/libertarian candidates whose personal beliefs were often at odds with the prejudices of the ideological troglodytes who voted for them. Perhaps the best historical analogy is with the “Dixiecrats” of the southern US states. From the 1940s to the 1970s, outstanding political leaders – like Senator William Fullbright – owed their seats to the votes of unapologetic white supremacists.

While Prebble led Act (1996-2004) the party polled between 6-7 percent of the Party Vote. With his departure in 2004, however, the party’s fortunes plummeted. To 1.5 percent in 2005, recovering slightly to 3.5 percent in 2008, back to 1 percent in 2011, and then to 0.7 percent under the cheerfully libertarian Jamie Whyte in 2014. In 2017, under the stewardship of Act’s incumbent leader, David Seymour, the party won just 0.5 percent of the Party Vote.

Kept in Parliament by its “Epsom Deal” with the National Party, Act seemed likely to fade into obscurity as a one-MP “appendage party”. Then, like so many aspects of New Zealand society, it was transformed by the impact of the Covid-19 pandemic. With National a fractious political hulk lying low in the water, many right-wing voters cast an angry protest vote for Act. From a risible 13,000 party votes in 2017, David Seymour’s party garnered a remarkable 219,000 votes in 2020 – beating Prebble’s best result (7 percent) by half a percentage point.

Seymour’s stewardship of the Act Party since 2020 has for the most part been exemplary. The party’s 9 additional MPs have presented themselves as a disciplined and competent team – offering voters a stark contrast to the bad behaviour afflicting all the other parliamentary parties. Act’s staunch defence of Free Speech, and its resolute opposition to much of the so-called “woke agenda” – especially co-governance – has pushed its numbers up and over 10 percent in the opinion polls. Not even National’s recovery under Christopher Luxon has been sufficient to seriously undermine Act’s support.

What does pose a threat to Act’s projected success on 14 October, is Seymour’s failure to be guided by Prebble’s thinking on candidate selection. Given the deeply conservative character of  Act’s newfound support – much of it subscribing to the dangerous conspiracy theories growing out of the Covid-19 crisis – the need to scrutinize the party’s prospective candidates within an inch of their lives was urgent. It was absolutely vital that Act’s next ten MPs were (to continue the American analogy) William Fullbrights – not Marjorie Taylor Greenes.

The withdrawal and/or resignation of five Act candidates over recent weeks – a number of them for making claims alarmingly similar to Marjorie Taylor Greene’s – has the potential to give voters pause. Some, perhaps many, will ask themselves just how much they really know about Act and what it stands for.

Here’s a clue: it ain’t libertarianism.

This essay was originally posted on the Interest.co.nz website on Monday, 11 September 2023.

Who Is Craig Renney, And What Is He Advising Grant Robertson To Do?

Back Room Player: Craig Renney, the person behind the person controlling New Zealand’s purse-strings:

VERY FEW NEW ZEALANDERS would have the slightest idea who Doug Andrew was or is. And yet, in his role as an economic advisor to the then Leader of the Opposition, David Lange, Andrew was one of the people who helped prepare the way for “Rogernomics” – the introduction of neoliberalism to New Zealand. Seconded in the early 1980s from Treasury – then a hotbed of “Chicago School” free market economics – Andrew was one of the principal conduits through which the economic ideas animating the governments of Margaret Thatcher and Ronald Reagan found their way into the policy-making forums of the New Zealand Labour Party.

Thirty-four years later, another economist, also with a Treasury (and Reserve Bank!) background, is proffering policy advice to another Labour Finance Minister. Craig Renney, identified by Stuff’s Vernon Small as one of the key “back room players” in Jacinda Ardern’s new Labour-NZ First-Green Government, has become Grant Robertson’s “economics adviser”; “the man who did the grunt-work on the Alternative Budget – and disproved National’s claim of a ‘fiscal hole’.”

And, that’s it. To find out any more about the person behind the person controlling New Zealand’s purse-strings, it is necessary to go hunting in the forests of the Internet.

Fortunately, Mr Renney is a pretty easy quarry to track down.

He appears to be a citizen of the United Kingdom, aged in his late 30s, who embarked on his professional career by enrolling in the University of Stirling as a student of Economics and Politics in 1997. After an intriguing stint in Prague (2000-2001) Renney undertook post-graduate study at the University of Northumbria in Newcastle, from which he received a Masters in Urban Policy and Sustainable Regeneration, and another, in Public Administration.

Upon leaving university, Renney worked, variously, in local government, the UK Audit Commission, and as a public-sector consultant. In 2012 he emigrated to New Zealand to take up an analyst’s position in the NZ Treasury. Between 2014 and 2016 he was a Senior Policy Adviser in Steven Joyce’s Ministry of Business, Innovation and Employment – from whence he was seconded to the Reserve Bank. In January of last year, he took on the job of Senior Economic Advisor in the Office of the Leader of the Opposition.

It’s an impressive CV. But, it tells us virtually nothing about the political leanings of its subject. The north-east of England, where Renney spent his university years, is generally regarded as the British Labour Party’s heartland. So, it is tempting to paint the advisor to our new Minister of Finance as a Geordie with traditional Labour sympathies. Certainly, the work he undertook for local governments in the north-east has the whiff of progressivism about it. On the other hand, Renney’s student years coincide with those of Tony Blair’s “New Labour” Government. So, it’s just as easy to see him as an eager follower of Anthony Gidden’s “Third Way” economic and social project.

The point is, we don’t know anything like enough about Craig Renney, let alone the direction in which he is steering our new Minister of Finance. And, dammit, we should know! Thirty-four years ago, advice was being tended to Roger Douglas that led directly to the radical restructuring of the entire economy and society of New Zealand – and we knew nothing about it!

This is what the New Zealand historian, Hugh Oliver, had to say about what was happening to Roger Douglas all those years ago:

Clearly an enormous shift had taken place in Douglas’s positions on economic policy and it appears that most of this shift occurred in the latter half of 1983. It is also apparent that the shift was towards the kind of free market economics that were espoused by the Treasury. It cannot be proved that the shift in ideas resulted from the influence of Treasury officials; however, it can be shown that it coincided in time with the presence in the Opposition Leader’s Office of Doug Andrew, a Treasury adviser with whom Douglas developed close links … During his time with the Labour Opposition Andrew produced papers on a range of economic policy topics and debated with existing opinions in the Caucus Economic Committee. Andrew argued for lower levels of trade protection as the key economic policy instrument. He argued for floating the currency as a matter of course.

Similarly, it is possible to show that Labour’s adoption of its radically self-limiting “Budget Responsibility Rules” coincided in time with the presence in the Leader of the Opposition’s Office of an economic adviser from the UK called Craig Renney. The same Craig Renney identified by Vernon Small as the person who did the “grunt work” on Labour’s Alternative Budget.

But what, exactly, does that mean? Is Craig merely putting flesh on the bones of Grant’s, and the Labour Policy Council’s, ideas? Or, are Grant and Labour merely repeating ideas and policy positions fed to them by Craig? And, if it’s the latter, then what are the ideas and policies our new government is being asked to swallow?

It is a question that has always intrigued me: “Who is more powerful? The person with a loaded rifle? Or the person who supplies the ammunition, places the rifle in another’s hands – and tells them who to shoot?”

This essay was originally posted on The Daily Blog of Tuesday, 31 October 2017.