Economist Brian Easton considers whether economist Rodd Carr's approach to climate change will have echoes from Carr's work in proposed Rogernomics health system reforms in the 1980s

This is a re-post of an article originally published on pundit.co.nz. It is here with permission.

Does it make sense to compare our climate change adaptation with Rogernomics?

(There is nothing in this column that questions the notion that global warming presents a serious challenge which will require considerable adaptation.)

Rod Carr, the chair of the Climate Change Commission, said that the shifts required to run our economy without fossil fuels will make the economic changes of the late 1980s ‘look like a trial period’.

I am not sure what part of Rogernomics Carr has in mind. Does he mean that the economy will stagnate for longer than the seven years it did then, creating record postwar unemployment, while the bottom 30 percent will experience major reductions in their living standards for even more than the twenty years that happened between 1984 and 2004.

Meanwhile, under Rogernomics the living standards at the top were protected and enhanced, funded by higher taxes and reductions in services and benefits to the bottom 90 percent, with a consequent spectacular increase in income inequality. Are they going to again  protect the rich at the expense of the rest of us?

Recall the attack on the welfare state with the marked reduction of its generosity and scope. Is another such attack on the agenda?

A particularly viscous assault was on the nation’s health system, with a proposed redisorganisation which would have commercialised the system towards an idealised version of the US one.

The attack begins with the report of the 1988 Gibbs Task Force (Unshackling the Hospitals). In 1990, the incoming Minister of Health (Simon Upton, currently the Commissioner for the Environment) appointed a Ministerial Committee on the Funding and Provision of Health Services which led to the infamous Green and White Paper Your Health & the Public Health: A Statement of Government Health Policy. (It was part green because even the National Cabinet could not stomach some of its more outrageous proposals.) And so we marched forward to an expensive redisorganisation of the health system resulting in more patient suffering and death. It almost completely failed.

The Ministerial Committee was chaired by Rod Carr, who told us then that there would be a ’meltdown’ if its recommendations were not implemented. They were not and the health system has not melted down. In fact it has done pretty well given the repressed public funding (which was an underlying feature of the Gibbs and Carr reports).

If there was a meltdown, it was support for the National Government which lost a quarter of its voters between 1990 and 1993. National’s prime minister, Jim Bolger, attributed the loss to the public’s reaction to the health redisorganisation – sometimes the public shows more wisdom than the politicians. (In fact National would have lost the 1993 election except Labour and the left was even more disorganised.) Perhaps that is what Carr has in mind for the climate change recommendations – the decimation of the Green Party.

What strikes one about the health redisorganisation is that once the momentum for commercialisation got underway, it was difficult to stop – even by the prime minister. The neoliberal ideologues led it, making outrageous claims detached from reality. But they convinced the ignorant, who dutifully did what they were told – and were well paid for their collaboration.

The ignorance was widespread. For instance, one of the lead administrators confused intensive care units with postoperative recovery units. (We may be grateful he had gone by the time of the Covid Crisis.) Some of the papers produced by the National Interim Provider Board, which was driving the changes, would have been graded a C had they been submitted for academic assessment. The NIPB was learning while it was wrecking the system.

Not that they consulted their betters. By coincidence, a number of internationally accliamed health economists were coming through the country at the time. (One was Alan Maynard who introduced the invaluable term ‘redisorganisation’). They were appalled by what was going on, but were ignored rather than approached. The momentum said that the implementers may not have know what they were doing but they were strongly committed to doing it.

A feature of the Rogernomes is that they rarely go back over the period. No doubt they would have, had they succeeded but they prefer to forget the failure. A nice illustration was that when a seminar was held on the health system changes few of of those who drove it turned up; the few that did talked about anything except what happened or their role.

The approach now seems to be to trivialise the downside of what happened under Rogernomics by comparing it with the prospects of adapting to climate change.

Mind you, we could repeat the farce by depending on  a neoliberal framework – which is typically to reduce the state and enhance the power of the rich – to implement the transition. One of the reasons that deniers of anthropogenic global warming tend to be at the neoliberal end of the political spectrum is they have not worked out how to apply their policy directions to climate change. What we can be sure of is that the more neoliberals involved, the bigger the foul up will be.

What may make the difference is that Rogernomics was done in a hurry. Roger Douglas would talk about getting it over in three or six years and that he would rather lose the next election than deviate from his policies. This time we are talking of a thirty year horizon – that is ten elections to lose. If they mismanage the carbon-emission transition in the way the Rogernomes did, the government will lose every one until it gets on a saner course.

There is an interesting parallel between Rogernomics and climate change adaptation. In each case we had failed to take sensible measures for decades earlier (market liberalisation in one case, reducing carbon emissions in the other). It is evident that the world should have been doing something since, say, the United Nations Conference on Environment and Development (a.k.a. the Rio de Janeiro Earth Summit) in 1992. New Zealand also has lagged, so we have a lot of catching up to do. But that is not a case for doing it badly powered by hysterical slogans and the forgetting of history.

Brian Easton, an independent scholar, is an economist, social statistician, public policy analyst and historian. He was the Listener economic columnist from 1978 to 2014. This is a re-post of an article originally published on pundit.co.nz. It is here with permission.